Full text: Capital Gains, Pension Funds and

2 
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^HE LOW SAVING RATIO IN THE UNITED STATES.*) 
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Some-tiiird^ago the question of the quality and reliability of 
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statistical data has been the-subject i3f\ crit\c^l—eemnfentr^Snd- 
contro^eagay 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 
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economists Qught-~fe©—be-inore-Tfeui-tatrl'e to undertake. 
The decline of the personal saving ratio to very unusually low 
C&l, orm Mifa* y ef-g.-iT 1 
levels in the 80s in U.S. has given^rise to some 7 .comment. The 
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following is to contribute something to the explanation of this 
development. &v L <J'> ^-y y , 
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 
saving,all accumulation is credited to the household. In 
* Acknowledgement is made to The Macmillan Publishing Co. for 
permission to reproduce the first part of this paper from the 
author"s ECONOMIC PAPERS 1941 - 1988, London 1990.
	        

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