Archive for the ‘Japan’ Category
Japan is no longer a saver – it is now emulating USA
Japan is joining the United States club. I guess it got tired of keep saving to just see its strength get eroded. Heck, now US is saving more than Japan J.
http://www.economist.com/finance/displayStory.cfm?story_id=13240636&source=hptextfeature
In the six months to January, it had an annualised trade deficit of ¥4 trillion ($39 billion), compared with a surplus of almost ¥11 trillion a year earlier.
total current-account surplus plunged to only ¥125 billion in December, 92% less than a year ago.
the saving rate of households has fallen from 18% of income in 1980 to an estimated 1% last year
The fall in saving is exactly what the “life-cycle hypothesis” would predict. People like to smooth consumption over their lifetimes, so during their working years they spend less than they earn and accumulate wealth, which they then draw down once they retire.
