A Household-Production-Function-based savings rate decided model and its empirical test
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| Title | A Household-Production-Function-based savings rate decided model and its empirical test
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| Author | Wang Jiaqiong, Xiao Yongqing, Li Weidong and Lü Xiaofeng |
| Organization | Capital University of Economics and Business;Beijing Jiaotong University |
| Email | wangjiaqiong@cueb.edu.cn，cnwzxyq@126.com，nju_lwd@263.net，gg-rr@sohu.com |
| Key Words | Time Preference; The Household Production Function; Savings Rate; Panel Data |
| Abstract | In the article, a savings rate decided model，which lays its emphasis on the price effect and income effect, is offered by making certain transformation on the consumption function, which is Household Production Function based. And the following empirical test is also conducted on the new model with the sample panel data of 156 countries between 1980 and 2010 in the World Bank DATABANK. The empirical test shows that new model is statistically significant to both the sample total and the samples grouped by either different income levels or business cycle, but with an advantage over the traditional model in goodness of fit testing. And the following application shows that the sharp difference of the savings rate between China and the United States can be explained with the new model. |
| Serial Number | WP220 |
| Time | 2012-02-16 |
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