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China’s household saving rate has increased markedly since the mid-1990s and the age-savings profile has become U-shaped. We find that rising income uncertainty and pension reforms help explain both of these phenomena. Using a panel of Chinese households covering the period 1989-2006, we document that strong average income growth has been accompanied by a substantial increase in income uncertainty. Interestingly, the permanent variance of household income remains stable while it is the transitory variance that rises sharply. A calibration of a buffer-stock savings model indicates that rising savings rates among younger households are consistent with rising income uncertainty and higher saving rates among older households are consistent with a decline in the pension replacement ratio for those retiring after 1997. We conclude that rising income uncertainty and pension reforms can account for over half of the increase in the urban household savings rate in China since the mid-1990s as well as the U-shaped age-profile of savings.

Labor --- Macroeconomics --- Public Finance --- Intertemporal Consumer Choice --- Life Cycle Models and Saving --- Macroeconomics: Consumption --- Saving --- Wealth --- Aggregate Factor Income Distribution --- Nonwage Labor Costs and Benefits --- Private Pensions --- Wages, Compensation, and Labor Costs: General --- Social Security and Public Pensions --- Pensions --- Labour --- income economics --- Income --- Wages --- Income shocks --- Pension reform --- National accounts --- Expenditure --- China, People's Republic of

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Significant aging is projected for many high-saving emerging economies of East and Southeast Asia. By 2025, the share of the elderly in their populations will at least double in most of these countries. The share of the young will fall. Aging populations could adversely affect saving rates in these economies, particularly after 2025. For the world, one may observe that, initially, the Asian Tigers could become increasingly important for world savings, reflecting their increased weight in the world economy, their high saving and growth rates, and the aging of the industrial countries. After 2025, the aging of the Tigers may reinforce the tendency toward a declining world saving rate.

Macroeconomics --- Demography --- Open Economy Macroeconomics --- Intertemporal Consumer Choice --- Life Cycle Models and Saving --- Macroeconomics: Consumption --- Saving --- Wealth --- Economics of the Elderly --- Economics of the Handicapped --- Non-labor Market Discrimination --- Demographic Economics: General --- Demographic Trends, Macroeconomic Effects, and Forecasts --- Population & demography --- Private savings --- Aging --- Population and demographics --- Public sector savings --- Demographic change --- National accounts --- Saving and investment --- Population aging --- Population --- Demographic transition --- China, People's Republic of

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Housing market imbalances are a key source of systemic risk and can adversely affect housing affordability. This paper utilizes a stylized model of the Canadian economy that includes policymakers with differing objectives—macroeconomic stability, financial stability, and housing affordability. Not surprisingly, when faced with multiple objectives, deploying more policy instruments can lead to better outcomes. The results show that macroprudential policy can be more effective than policies based on adjusting propertytransfer taxes because property-tax policy entails excessive volatility in tax rates. They also show that if property-transfer taxes are used as a policy instrument, taxes targeted at a broader-set of homebuyers can be more effective than measures targeted at a smaller subset of homebuyers, such as nonresident homebuyers.

Infrastructure --- Macroeconomics --- Real Estate --- Taxation --- Intertemporal Consumer Choice --- Life Cycle Models and Saving --- Macroeconomics: Consumption --- Saving --- Wealth --- Financial Markets and the Macroeconomy --- Open Economy Macroeconomics --- Economic Development: Urban, Rural, Regional, and Transportation Analysis --- Housing --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Housing Supply and Markets --- Public finance & taxation --- Property & real estate --- Consumption --- Transaction tax --- Housing prices --- Macroprudential policy --- National accounts --- Taxes --- Prices --- Financial sector policy and analysis --- Saving and investment --- Economics --- Economic policy --- Canada

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In this paper, we study the macroeconomic impact of pension reform options in Chile, using a dynamic general equilibrium model. The main reform proposal considers raising contributions (employer side) and vehicle additional proceeds to individual accounts and to increase the support of solidarity pensions. We model increased contributions as a labor tax. We find the impact of this reform on GDP to be negative in the near to the medium run, with GDP declining by 0.5 percent by 2021, as a result of labor tax distortions which lead to a fall in labor supply, investment and to a loss in competitiveness. We also illustrate the main macroeconomics tradeoffs by analyzing alternative reforms, such as using revenues only to improve future pensions or a reform package funded by a mix of higher contributions and indirect taxes.

Pensions --- Pensions. --- Compensation --- Pension plans --- Retirement pensions --- Superannuation --- Retirement income --- Annuities --- Social security individual investment accounts --- Vested benefits --- E-books --- Labor --- Macroeconomics --- Public Finance --- Demography --- Intertemporal Consumer Choice --- Life Cycle Models and Saving --- Fiscal Policy --- Fiscal Policies and Behavior of Economic Agents: Household --- Social Security and Public Pensions --- Nonwage Labor Costs and Benefits --- Private Pensions --- Economics of the Elderly --- Economics of the Handicapped --- Non-labor Market Discrimination --- Macroeconomics: Consumption --- Saving --- Wealth --- Population & demography --- Pension spending --- Aging --- Consumption --- Pension reform --- Expenditure --- Population and demographics --- National accounts --- Population aging --- Economics --- Chile

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We provide a systematic analysis of the properties of individual returns to wealth using twelve years of population data from Norway’s administrative tax records. We document a number of novel results. First, during our sample period individuals earn markedly different average returns on their financial assets (a standard deviation of 14%) and on their net worth (a standard deviation of 8%). Second, heterogeneity in returns does not arise merely from differences in the allocation of wealth between safe and risky assets: returns are heterogeneous even within asset classes. Third, returns are positively correlated with wealth: moving from the 10th to the 90th percentile of the financial wealth distribution increases the return by 3 percentage points - and by 17 percentage points when the same exercise is performed for the return to net worth. Fourth, wealth returns exhibit substantial persistence over time. We argue that while this persistence partly reflects stable differences in risk exposure and assets scale, it also reflects persistent heterogeneity in sophistication and financial information, as well as entrepreneurial talent. Finally, wealth returns are (mildly) correlated across generations. We discuss the implications of these findings for several strands of the wealth inequality debate.

Wealth --- Income distribution --- Saving and investment --- Accumulation, Capital --- Capital accumulation --- Capital formation --- Investment and saving --- Saving and thrift --- Capital --- Supply-side economics --- Investments --- Affluence --- Distribution of wealth --- Fortunes --- Riches --- Business --- Economics --- Finance --- Money --- Property --- Well-being --- Econometric models. --- Infrastructure --- Investments: Stocks --- Macroeconomics --- Personal Income, Wealth, and Their Distributions --- Intertemporal Consumer Choice --- Life Cycle Models and Saving --- Macroeconomics: Consumption --- Saving --- Employment --- Unemployment --- Wages --- Intergenerational Income Distribution --- Aggregate Human Capital --- Aggregate Labor Productivity --- Portfolio Choice --- Investment Decisions --- Aggregate Factor Income Distribution --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Economic Development: Urban, Rural, Regional, and Transportation Analysis --- Housing --- Investment & securities --- Stocks --- Capital income --- Income --- National accounts --- Financial institutions --- Working capital --- Norway