Understanding Savings

Analysis of consumption and saving decisions by households has always been one of the most active areas of research in economics--and with good reason. Private consumption is the most important component of aggregate demand in a capitalist economy, and explaining consumption is the key element in most macroeconomic forecasting models. To evaluate the effect of government policies invariably requires the knowledge of how they change parameters relevant for household decision making.Understanding Saving collects eleven papers by economist Fumio Hayashi, along with two previously unpublished chapters, for a total of thirteen chapters. The monograph, which brings together Hayashi's empirical research on saving, is divided into three sections. Part I, "Liquidity Constraints", contains five studies that test the well-known implication of the Life Cycle-Permanent Income hypothesis that households shield consumption from income fluctuations. Part II, "Risk-Sharing and Altruism", contains three papers that examine the interactions between related and unrelated households predicted by the hypothesis for the US and Japanese households. The three papers in Part III, "Japanese Saving Behavior", present the author's explanation of the high saving rate in postwar Japan.

ISBN 0262082551   Pages 492 ISBN13 9780262082556 (What's this?)   Volumes 1 Publisher MIT Press Ltd   Weight (grammes) 953 Imprint MIT Press   Published in Cambridge, Mass. Format Hardback   Height (mm) 229 Publication date 29 Aug 1997   Width (mm) 152 Library of Congress HC465.S3H3   Spine width (mm) 33 DEWEY 339.430952   Academic level Undergraduate, Postgraduate, Professional / Scholarly DEWEY edition DC21

		Preface
1		Introduction to Parts I and II: A Review of Empirical Studies of Household Saving		3
2		The Permanent Income Hypothesis: Estimation and Testing by Instrumental Variables		29
		Addendum to Chapter 2: Estimation Using Updated Data		53
3		The Effect of Liquidity Constraints on Consumption: A Cross-Sectional Analysis		57
4		The Permanent Income Hypothesis and Consumption Durability: Analysis Based on Japanese Panel Data		81
		Addendum to Chapter 4: Consumption Growth Equation for Food		111
5		Testing the Life Cycle - Permanent Income Hypothesis on Japanese Monthly Panel Data		115
6		Tests for Liquidity Constraints: A Critical Survey and Some New Observations		141
7		Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data		175
8		Is the Japanese Extended Family Altruistically Linked? A Test Based on Engel Curves		209
9		Risk Sharing between and within Families		241
10		Introduction to Part III: A Review of Recent Literature on Japanese Saving		289
11		Why Is Japan's Saving Rate So Apparently High?		331
		Addendum to Chapter 11: An Update of Data Approach		391
12		Life Cycle and Bequest Savings: Evidence from a Large Cross-Section of Japanese Households		407
13		Housing Finance Imperfections and Private Saving: A Simulation Analysis		477
		Index		503

"Fumio Hayashi has been a major contributor to the explosion ofresearch on the economics of saving. His consistently creativeanalysis of the evidence, and particularly of the contrasts betweenthe U.S. and Japan, has advanced our understanding and raised manynew puzzles. This book will be indispensible to all researchers inthe field." Angus Deaton , Professor of Economics, Princeton University

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