National Saving and Economic Performance (National Bureau of Economic Research Project Report) - Hardcover

Hardcover

ISBN 10: 0226044041 ISBN 13: 9780226044040

Verlag: UNIV OF CHICAGO PR, 1991

Inhaltsangabe

The past decade has witnessed a decline in saving throughout the developed world—the United States has the dubious distinction of leading the way. The consequences can be serious. For individuals, their own economic security and that of their families is jeopardized. For society, inadequate rates of saving have been blamed for a variety of ills—decreasing the competitive abilities of American industry, slowing capital accumulation, increasing our trade deficit, and forcing the sale of capital stock to foreign investors at bargain prices. Restoring acceptable rates of saving in the United States poses a major challenge to those who formulate national economic policy, especially since economists and policymakers alike still understand little about what motivates people to save.

In National Saving and Economic Performance, edited by B. Douglas Bernheim and John B. Shoven, that task is addressed by offering the results of new research, with recommendations for policies aimed to improve saving. Leading experts in diverse fields of economics debate the need for more accurate measurement of official saving data; examine how corporate decisions to retain or distribute earnings affect household-level consumption and saving; and investigate the effects of taxation on saving behavior, correlations between national saving and international investment over time, and the influence of economic growth on saving.

Presenting the most comprehensive and up-to-date research on saving, this volume will benefit both academic and government economists.

Über diesen Titel

Über die Autorin bzw. den Autor

B. Douglas Bernheim is the John L. Weinberg Professor of Economics and Business Policy at Princeton University. John B. Shoven is professor of economics at Stanford University.

Von der hinteren Coverseite

Presenting the most comprehensive and up-to-date research on saving, this volume will be a valuable resource for both academic and government economists.

Auszug. © Genehmigter Nachdruck. Alle Rechte vorbehalten.

National Saving and Economic Performance

By B. Douglas Bernheim, John B. Shoven

The University of Chicago Press

Copyright © 1991 National Bureau of Economic Research
All rights reserved.

ISBN: 978-0-226-04404-0

Contents

Acknowledgments, 
Introduction B. Douglas Bernheim and John B. Shoven, 
1. Market Value versus Financial Accounting Measures of National Saving David F. Bradford, 
Comment: Joseph E. Stiglitz, 
2. Dividends, Capital Gains, and the Corporate Veil: Evidence from Britain, Canada, and the United States James M. Poterba, 
Comment: Robert E. Hall, 
3. Corporate Savings and Shareholder Consumption Alan J. Auerbach and Kevin Hassett, 
Comment: Angus S. Deaton, 
4. The Saving Effect of Tax-deferred Retirement Accounts: Evidence from SIPP Steven F. Venti and David A. Wise, 
Comment: Michael Rothschild, 
5. Consumption Taxation in a General Equilibrium Model: How Reliable Are Simulation Results? B. Douglas Bernheim, John Karl Scholz, and John B. Shoven, 
Comment: Joel Slemrod, 
6. Taxes and Capital Formation: How Important Is Human Capital? James Davies and John Whalley, 
Comment: Sherwin Rosen, 
7. National Saving and International Investment Martin Feldstein and Philippe Bacchetta, 
Comment: Rudiger Dornbusch, 
8. Quantifying International Capital Mobility in the 1980s Jeffrey A. Frankel, 
Comment: Maurice Obstfeld, 
9. A Cross-Country Study of Growth, Saving, and Government Robert J. Barro, 
Comment: James Tobin, 
10. Consumption Growth Parallels Income Growth: Some New Evidence Christopher D. Carroll and Lawrence H. Summers, 
Comment: N. Gregory Mankiw, 
11. Saving Behavior in Ten Developing Countries Susan M. Collins, 
Comment: Anne O. Krueger, 
Notes, 
Contributors, 
Author Index, 
Subject Index, 

CHAPTER 1

Market Value versus Financial Accounting Measures of National Saving

David F. Bradford

1.1 Introduction

This essay is a venture into well-trodden terrain: the definition of saving. Because so many others have thought about the same issues, probably nothing I say here has not been said before by someone else. J.R. Hicks (1946) mapped the territory in a particularly well-known theoretical treatment. More recently, Auerbach (1985), Boskin (1986, 1988), Eisner (1980, 1988), Goldsmith (1982), Peek (1986), Ruggles and Ruggles (1981), and Shoven (1984) have discussed many of the points raised here in connection with empirical explorations of saving and wealth. In his presidential address to the American Economic Association, Eisner (1989) included the main theses argued here in a broadside indictment of the divergence between measurement and theory to be found in economics. This paper differs, perhaps, in degree of emphasis of two propositions. The minor theme is that saving should be defined by reference to the underlying concept of wealth to which the saving is an increment. The major theme is that the most useful wealth concept is the market value of assets, not the cost-based measure of capital implied by the use of national income and product account (NIPA) saving. Whereas NIPA investment measures tell us something about the margin of productive additions to the stock of wealth in a particular form, the (definitionally equal) saving measures are neither those that the microeconomic theory of consumption explains nor those appropriate to assess national economic performance.

Inspection of a sample of the extensive literature commenting on and analyzing national saving has surprised me by the diversity of positions, often implicit, on these issues. It appears that the macroeconomists are truer to microeconomic principles than are many of those who approach the subject from a public finance perspective. The fact that so much research is carried out making use of statistical measures of saving that seem to me to bear so little relationship to economic theory suggests there is a place for a review of fundamentals and display of some basic data related to them.

1.1.1 Income, Saving, and Wealth

Beginning students are taught that saving is a residual, what is left from personal income after deducting consumption and taxes or after deducting from aggregate income consumption by households and governments. But saving is also conceived of as an addition to wealth, and it is not always recognized that the three ideas—consumption, income, and wealth—are not independent. Defining any two determines the definition of the third. The Schanz-Haig-Simons (SHS) conception of income familiar to public finance takes the ideas of consumption and wealth as fundamental and defines income as the sum of consumption and the change in wealth during an accounting period. The basic notion of wealth, in turn, is the market value of a household's (or household aggregate's) stock of claims on goods and services in the future. This is the approach to saving taken by the microeconomic theory of household behavior.

Most commentary on and analysis of national saving, by contrast, start with a NIPA definition of income. To make life confusing, the term "income" in the national income account context is attached to factor payments and makes distinctions between taxes regarded as falling on factor payments and those that do not (indirect business taxes). It is doubtful that there is an economically meaningful distinction between taxes that bear on factor payments and those that do not. We can cut through the problem if, for the concept of income in the SHS sense, we read "product" in the national accounting sense.

Which of the three notions—product, consumption, wealth—are fundamental in the case of national income accounting is not immediately obvious. As is well known, national income accounts involve two conceptions of product, gross and net. Gross national product, "the market value of the goods and services produced by labor and property supplied by residents of the United States (U. S. Department of Commerce, Bureau of Economic Analysis 1986), and consumption, personal and governmental, can reasonably be described as the fundamental ideas. Together (by subtraction) they define gross investment and saving. To reach net product, net investment, and net saving, it is necessary to subtract an allowance for the "using up" of the reproducible capital stock, a wealth notion. Here, then, it is the wealth and consumption ideas that are fundamental: we can think of net product (income) as definitionally equal to the sum of consumption (personal and governmental) and the change in the reproducible capital stock owned by U.S. residents.

1.1.2 NIPA Saving and Financial Accounting

In its treatment of business investment and its yield, the NIPA net income concept can be loosely characterized as a consolidation of the account books of business firms. This is not to suggest that the NIPA accountants actually aggregate the income statements and balance sheets of firms. It is rather to emphasize that investment (and therefore saving) in the national income and product accounts consists of acquisitions of tangible property and is, furthermore, cost-based, constructed from historical data on expenditures for machines, structures, and inventories. Increments in the value of intangible property and (what may be the same thing) revaluations of tangible property arising from its location within going businesses are excluded from the NIPA income and saving concepts. Net saving in the national income and product accounts constitutes the change...

Details zur Ausgabe

• Verlag: UNIV OF CHICAGO PR
• Erscheinungsdatum: 1991
• Sprache: Englisch
• ISBN 10: 0226044041
• ISBN 13: 9780226044040
• Einband: Gebundene Ausgabe
• Anzahl der Seiten: 396
• Herausgeber: Shoven John B., Bernheim B. Douglas
• Kontakt zum Hersteller: Nicht verfügbar
• Verantwortliche Person: Wiley-VCH GmbH; product_safety@wiley.com; ; Boschstrasse 12; Weinheim; 69469; Deutschland