Capital Gains, Pension Funds and the Low Savings Ratio in the United States

Steindl, Josef

Bibliographic data

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: Capital Gains, Pension Funds and the Low Savings Ratio in the United States

Author:: Steindl, Josef

Scope:: Typoskript, 13 Blätter, mit zahlreichen Anstreichungen und Anmerkungen sowie 7 Blätter statistische Tabellen (GDP) und handschriftliche Auswertungen

Year of publication:: 1990

Source material date:: [vermutlich um 1990]

Language:: English

Description:: Reliability of statistical data, household savings as contributions to pension funds or life insurance companies.

Note:: Unveröffentlichtes Typoskript.

Related work:: Steindl, Josef: Capital Gains, Pension Funds and the Low Savings Ratio in the United States. In: Banca Nazionale del Lavoro Quarterly Review, Vol. 43, Issue 173, June 1990, S. 165-177

Topic:: Saving and distribution

JEL Classification:: E01 [Measurement and Data on National Income and Product Accounts and Wealth, Environmental Accounts] E21 [Macroeconomics: Consumption, Saving, Wealth] G23 [Pension Funds, Non-bank Financial Institutions, Financial Instruments, Institutional Investors]

Shelfmark:: S/M.49.1

Access:: Free access

6 in form of residential housing have been subjected to a critical analysis which makes them appear in a new light. Tibor Scitovsky showed that to a very large extent the reduction in the personal saving ratio in the 70s was due to its being calculated net, and to the very high capital consumption allowances for dwelling houses which are used in calculating it and which increased to an extraordinary extent in the late 70s owing to the inflation in housing prices(Scitovsky 1986). This kind of reckoning, Scitovsky argues, is unrealistic because it does not take account of the fact that house owners owing to the considerable increase in the value of their property can realise capital gains which make it unnecessary for them to provide for replacement. If the personal saving is calculated on a gross basis,then, as Scitovsky shows, the decline since 1977 is rather smaller than the decline of the net saving ratio given by NIPA. (The gross rate is also better suited for international comparisons in most cases). There is,however,still a decline,that is, also the gross rate is lower than it was in the early 70s. Professor Scitovsky's calculation extend only to 1979;I have made a very rough calculation for the years 1980 to 1987 by adding the capital consumption allowance with adjustment for owner occupied non-farm houses to the personal saving (Table 6).The discrepancy between gross and net saving rate did not increase any further since 1980 but if we add to the grosss saving ratios the correction of about 2 to 2.5 p.c.mentioned further above it appears that the dramatic decline of the saving rate becomes a rather less impressive experience.We may still ask ourselves whether the decline in net saving which still remains after the corrections is not due to an increased inclination of households to indebt themselves . To get a measure of households'

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