2 
CAPITAL GAINS ,PENSION FUNDS AND THE LOW SAVING RATIO IN THE 
UNITED STATES.*) 
I 
Not long ago the question of the quality and reliability of 
statistical data has received attention in wide circles in the 
United States. The following paper deals not with the quality but 
rather with the interpretation of statistics which may often be 
difficult for the general public but which economists should be 
competent to undertake. 
The decline of the personal saving ratio to very unusually low 
levels in the 80s in U.S. has worried some economists there.The 
following is to contribute something to the explanation of the low 
saving ratio. 
A considerable part of the household saving takes the form of 
contributions of employers to the pension funds and of premium 
payments of employees to life insurance companies . From the point 
of view of effective demand this should,in general, make no 
difference.lt is in any case saving,invested in financial 
assets,only the household does not have full and direct control 
over it all the time. From a statistical point of view,however,a 
few complications arise.The U.S. National Income and Product 
Accounts (briefly NIPA) as well as the Flow of Funds (FF) of the 
Federal Reserve credit the assets of the pension funds as a whole 
as well as the policy reserves of the life insurance companies to 
the households. The implication is that the funds do not make any 
* Acknowledgement is made to The Macmillan Rubbishing"Co. for 
permission to reproduce the first part of this paper from the 
author's ECONOMIC PAPERS 1941 - 1988, London 1990.