Saving, Pension Contributions, and the Real Interest Rate

A test of the hypothesis that estimates of the interest elasticity of personal and private saving may be biased downward by a failure to control for behavior related to defined benefit pension programs fails to reject existence of a positive interest elasticity of private saving. Correcting for pens...

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Veröffentlicht in:The review of economics and statistics 1989-08, Vol.71 (3), p.401-407
Hauptverfasser: Makin, John H., Couch, Kenneth A.
Format: Artikel
Sprache:eng
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Zusammenfassung:A test of the hypothesis that estimates of the interest elasticity of personal and private saving may be biased downward by a failure to control for behavior related to defined benefit pension programs fails to reject existence of a positive interest elasticity of private saving. Correcting for pension funding bias, the estimated interest elasticity of private saving is 0.04, well below Boskin's (1978) estimate of 0.4 obtained with a different data set and different estimation procedures. The estimated interest elastivity of personal saving is 0.28.
ISSN:0034-6535
1530-9142
DOI:10.2307/1926896