IMF Working Papers

This paper examines factors affecting saving, policy tools, and tax reform. The literature on factors affecting saving and capital formation in industrialized countries is reviewed, and measurement problems are examined. The effect on the saving rate of real rates of return, income redistribution, allocation of saving between corporations and individuals, growth of public and private pension plans, tax incentives, the bequest motive, energy prices, and inflation is considered. The limited tools available to policymakers to affect savings are discussed.

Abstract

This paper examines factors affecting saving, policy tools, and tax reform. The literature on factors affecting saving and capital formation in industrialized countries is reviewed, and measurement problems are examined. The effect on the saving rate of real rates of return, income redistribution, allocation of saving between corporations and individuals, growth of public and private pension plans, tax incentives, the bequest motive, energy prices, and inflation is considered. The limited tools available to policymakers to affect savings are discussed.

Staff Papers draws on IMF Working Papers, which are research studies by members of the Fund’s staff. A list of Working Papers issued in 1989:4 follows; additions will be noted in future issues.

“External Imbalances and Fiscal Policy in the Group of Three Countries: The Role of Stock-Row Dynamics,” by Jeroen J.M. Kremers [89/81]

“In Search of a Monetary Anchor: A ‘New’ Monetary Standard,” by Warren L. Coats, Jr. [89/82]

“Risk Neutrality and the Two-Tier Foreign Exchange Market: Evidence from Belgium,” by Robert P. Flood and Nancy Marion [89/83]

“Optimal Fiscal Policy and Government Provision of Contingent Liabilities: The Example of Government Loan and Deposit Guarantees,” by Christopher M. Towe [89/84]

“Wealth, Financial Liberalization, and the Demand for Money in Japan,” by Robert Corker [89/85]

“Inflation in African Countries: General Issues and Effect on the Financial Sector,” by Joshua Greene [89/86]

“IMF Advice on Fiscal Policy,” by Alan A. Tait [89/87]

“The Effects of Financial Deregulation on Consumption,” by Tamin Bayoumi and Pinelopi Koujianou [89/88]

“A Systems Approach to Estimating the Natural Rate of Unemployment and Potential Output for the United States,” by Charles Adams and David T. Coe [89/89]

“External Adjustment and the Optimal Demand for International Reserves,” by lnsu Kim [89/90]

“Trade Policy and Market Structure Interactions in Developing Countries,” by Ratna Sahay [89/91]

“Monetary Concepts and Definitions,” by Emmanuel O. Kumah [89/92] “Fiscal Policy for Stable and Equitable Growth in Latin America,” by Vito Tanzi and Ke-young Chu [89/93]

“Fiscal Policy and Economic Reconstruction in Latin America,” by Vito Tanzi [89/94]

“The Flow-of-Funds Accounts, the United Nations’ System of National Accounting, and the Developing Countries,” by John C. Dawson [89/95]

“Transactions Costs and Vehicle Currencies,” by Stanley Black [89/96]

“The Recent Behavior of Business Fixed Investment in the United States and the Role of Computers,” by Owen Evans [89/97]

“Monetary Policy in the Philippines During Periods of Financial Crisis and Changes in Exchange Rate Regime: Targets, Instruments, and the Stability of Money Demand.” by David Goldsbrough and Iqbal Zaidi [89/98]

“National and Personal Saving in the United States: Measurement and Analysis of Recent Trends,” by A. Lans Bovenberg and Owen Evans [89/99]

“Implications of a Lower Capital Gains Tax Rate in the United States,” by Krister Andersson [89/100]

“Foreign Exchange Market Intervention and Domestic Monetary Control in Japan, 1973-89,” by Shinji Takagi [89/101]

“Saving, Investment, Financial Integration, and the Balance of Payments,” by Michael Artis and Tamim Bayoumi [89/102]

“National Savings and Targets for the Federal Budget Balance in the United States,” by Owen Evans [89/103]

“A Subsistence-Linked Economy: The Case of the Solomon Islands,” by Bemhard Fritz-Krockow [89/104]

“Adjustment Uncertainty, Confidence, and Growth: Latin America After the Debt Crisis,” by Mario I. Blejer and Alain Ize [89/105]

“Efficiency in Commodity Futures Markets,” by Graciela Kaminsky and Manmohan S. Kumar [89/106]

“Fiscal Constraints of a Fixed Exchange Rate Regime,” by Hugh Bredenkamp and Michael Deppler [89/107]

A limited supply of IMF Working Papers is available free of charge to interested scholars and research institutions. In requesting a particular paper (or papers), please indicate the Working Paper number {for example, WP/89/1), title, and author(s). Requests should be made to:

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