Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/145901
Authors: 
Scheuermeyer, Philipp
Bofinger, Peter
Year of Publication: 
2016
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2016: Demographischer Wandel - Session: Applied Microeconomics II F01-V2
Abstract: 
Based on a panel of 29 advanced economies, this paper documents a non-monotonic link between inequality and the aggregate household saving rate. It finds that, at a low level of inequality, more inequality is associated with higher saving; but it also shows that a negative relationship between inequality and saving prevails, where inequality is high. Using different empirical approaches, we locate the turning-point at a net income Gini coefficient around 30. Moreover, we show that the relationship between inequality and saving depends on financial market conditions. While inequality increases saving, when credit is scarce, it tends to reduce saving at high levels of financial depth.
JEL: 
C23
D31
E21
Document Type: 
Conference Paper

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