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Household Saving and The Rate of Interest *
Author(s) -
OULIARIS SAM
Publication year - 1981
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1981.tb01054.x
Subject(s) - economics , interest rate , consumption (sociology) , estimation , real interest rate , econometrics , monetary economics , social science , management , sociology
This paper examines the relationship between the post‐tax real interest rate and the Australian household saving ratio at the empirical level. Using alternative models of the consumption‐saving decision and different estimation periods, it is shown that the post‐tax real interest rate exerts a significant negative influence on the saving ratio. The estimates, therefore, imply that the fall in post‐tax real interest rates during the 1970s contributed to the rise in the Australian saving ratio.