Selo Imrohoroglu
University of Southern California

Abstract

The saving rate in the U.S. has been declining since 1960s. There have also been significant secular changes in population growth, tax rates on labor and capital, and the depreciation rate of capital in this period. We use the standard growth theory calibrated to the U.S. data to evaluate the quantitative role of these factors in contributing to the decline in the saving rate. Our findings indicate that the decline in the population growth rate and the increase in the depreciation rate are significant in explaining the secular trends, where as the medium term fluctuations in the total factor productivity seem important in driving the year-to-year movements in the U.S. saving rate since the 1960s.

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