Household Saving in France: Stochastic Income and Financial Deregulation

IMF Working Papers, November 1, 1994

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Household Saving in France: Stochastic Income and Financial Deregulation

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Bibliographic details

• Authors: Joaquim Vieira Ferreira Levy, Jonathan David Ostry
• Published: November 1, 1994
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451855746.001

Overview and authorship

• Title: Household Saving in France: Stochastic Income and Financial Deregulation
• Authors: Joaquim Vieira Ferreira Levy, Jonathan David Ostry
• Publication: IMF Working Paper No. 1994/136
• Date: November 1, 1994
• Pages: 32
• DOI: https://doi.org/10.5089/9781451855746.001
• Volume: 1994
• Issue: 136
• Stock No: WPIEA1361994
• ISBN: 9781451855746
• ISSN: 1018-5941

Core thesis and themes

• The household saving ratio in France experienced very sharp changes over the two decades prior to publication: it fell dramatically in the first part of the 1980s and rose in more recent years.
• The paper emphasizes two main factors influencing the evolution of private saving in France:
  • Perceptions of household income growth and uncertainty, likely influenced by deteriorating labor market conditions, which may help account for the recent increase in saving.
  • Financial deregulation, which may have lowered saving and increased its sensitivity to interest rate changes.
• The authors argue that both factors have played some role in the evolution of French household saving.

Subject classifications and keywords

• Subject areas: Financial institutions, Financial services, Futures, Labor, National accounts, Personal income, Precautionary savings, Real interest rates
• Keywords: Futures, growth variable, household saving, income growth, interest rate, labor income, Personal income, Precautionary savings, present value, Real interest rates, saving ratio, WP

Key findings and analytical emphasis

• The saving ratio exhibited a pronounced decline in the early 1980s followed by a subsequent rise in later years.
• Perceived changes in income growth and income uncertainty are highlighted as important determinants of precautionary saving behavior in France.
• Financial deregulation is identified as a factor that could reduce the overall level of saving while increasing the sensitivity of saving to interest rate changes.
• The paper presents the argument that both stochastic income considerations (income growth and uncertainty) and financial deregulation jointly contributed to the observed evolution of household saving in France.

Publication and dissemination notes

• Also published in Staff Papers, Vol. 42, No. 2, June 1995.
• The Working Paper contains research in progress; it is not to be reported as representing the views of the IMF. The views expressed are those of the author(s) and do not necessarily represent those of the IMF or IMF policy.

IMF Working Paper No. 1994/136 — "Household Saving in France: Stochastic Income and Financial Deregulation" by Joaquim Vieira Ferreira Levy and Jonathan David Ostry (November 1, 1994).