What Drives Household Savings?

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February 3, 2014

Between 1995 and 2012 household net saving (as a % to GDP) has been characterized by considerable volatility over time and also significant heterogeneity across the main developed nations. The aim of this paper is to ascertain the key factors driving household savings in the last 16 years.

Household saving has been characterized by considerable volatility over time and heterogeneity across the main developed nations in the last two decades. Six key determinants of household saving behavior were found: past savings, incomes (consumption habits), market returns (wealth effect), market volatility (uncertainty effect), credit markets and taxation.



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