International Comparisons of Household Saving

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  1. Germany's long-standing fascination with saving money
  2. International Comparisons of Household Saving
  3. Introduction
  4. The economic impact of increased US savings

Following a rise in H1, they pushed their saving rate down into negative territory. The aggregated quarterly household budget statistics published by the CZSO since the start of see Chart 3 allow us to compare the saving rate, calculated as the difference between net money income and expenditure over net money income, with the statistics available from non-financial sector accounts see Chart 1.

By contrast, a very different trend in the saving rate can be seen at the start of , when the property market boom peaked. A deeper analysis of annual household budgets available down to the level of individual households see Chart 3 reveals that the growth in the saving rate compared to is due mainly to a marked decline in property purchases in the following years.

Germany's long-standing fascination with saving money

In addition to falling expenditure on property purchases, however, the increase in the saving rate is due to falling long-term consumption. Falling purchases of motor vehicles have gradually acted in the same direction although to a much lesser extent since Based on this analysis, it is reasonable to assume that the saving rate growth observed in H1 was still due mainly to falling long-term household consumption. Looking at the saving rate by income quartiles see Chart 4 , one can see a slightly downward trend in the saving rate among households in the first income quartile.

By contrast, higher-income households are showing a gradual increase in the long run. By , there were more than of these savings banks operating in the then German Confederation, allowing Germans to save their hard earned income for some interest. There is plenty of evidence in the exhibition that the concept of saving was established as a virtue from this period, through the Weimar Republic, which followed World War I, then in the Nazi era and after World War II on both sides of the Berlin Wall.

The legacy of this virtue has made Germans the top savers in the world.

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The last time UK households came close to the German savings rate was in Two decades later, in , German savers keep an equivalent of 9. Looking at total savings of households, companies and the government gross domestic savings in these two countries, the gap is equally large.

International Comparisons of Household Saving

Germans not only save more than their UK counterparts, but the deep rooted national habit has more implications than those numbers would reveal. Understanding the German obsession with savings is important when one wants to understand German attitudes towards domestic and European policies.

The reason for these low interest rates, along with large programmes of quantitative easing, was to stabilise the European banking sector and to encourage lending, spending and economic recovery. The move was widely praised by various governments. The virtue of saving in Germany is not limited to households or companies, but to state finances too.


A good state does not live beyond its means and saves money where it can. The state, seen as the virtuous and prudent Swabian housewife , is at the centre of the German pro-austerity narrative, which has not only affected domestic but most of all European policies. The national household savings rate slipped to minus 1.

The situation adds an extra layer of complexity to the task facing Mr.

The economic impact of increased US savings

And Japanese businesses have replaced households as avid hoarders of cash. In an era of slow growth, they see few investment opportunities, so profits simply pile up in the bank. One goal of Mr. The prime minister has lobbied hard on the pay issue, brokering meetings between executives and union leaders and dangling the prospect of corporate tax cuts as a reward for wage increases.

Most experts say it would be a good thing if businesses hoarded less and spent more.

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But Mr. Naohiko Baba, the chief Japan economist at Goldman Sachs, worries what will happen if both households and companies turn their backs on saving. Yet about 90 percent of the debt is held locally, meaning that Japan is, in effect, lending to itself. That is one reason, economists say, that Japan has avoided the kind of bond market pressure that has sent less indebted countries like Greece into crisis.

Baba calculates that Japan could run short of the savings it needs to fund the debt locally by about After that, it would need to turn to foreign investors — a potentially destabilizing shift.