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Housing Prices And The High Chinese Saving Rate Puzzle
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Book Synopsis Housing Prices and the High Chinese Saving Rate Puzzle by : Xin Wang
Download or read book Housing Prices and the High Chinese Saving Rate Puzzle written by Xin Wang and published by . This book was released on 2015 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: China's over 25% aggregate household saving rate is one of the highest in the world. One popular view attributes the high saving rate to fast-rising housing prices in China. However, cross-sectional data do not show a significant relationship between housing prices and household saving rates. This article uses a simple consumption-saving model to explain why rising housing prices per se cannot explain China's high household saving rate. Although borrowing constraints and demographic changes can translate housing prices to the aggregate saving rate, quantitative simulations of our model using Chinese time-series data on household income, housing prices, and demographics indicate that rising mortgage costs can increase the aggregate saving rate by at most 2 to 4 percentage points in the best down-payment structure.
Book Synopsis China’s High Savings: Drivers, Prospects, and Policies by : Ms.Longmei Zhang
Download or read book China’s High Savings: Drivers, Prospects, and Policies written by Ms.Longmei Zhang and published by International Monetary Fund. This book was released on 2018-12-11 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: China’s high national savings rate—one of the highest in the world—is at the heart of its external/internal imbalances. High savings finance elevated investment when held domestically, or lead to large external imbalances when they flow abroad. Today, high savings mostly emanate from the household sector, resulting from demographic changes induced by the one-child policy and the transformation of the social safety net and job security that occured during the transition from planned to market economy. Housing reform and rising income inequality also contribute to higher savings. Moving forward, demographic changes will put downward pressure on savings. Policy efforts in strengthening the social safety net and reducing income inequality are also needed to reduce savings further and boost consumption.
Book Synopsis China's High Saving Rate by : Guonan Ma
Download or read book China's High Saving Rate written by Guonan Ma and published by . This book was released on 2010 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: The saving rate of China is high from many perspectives - historical experience, international standards and the predictions of economic models. Furthermore, the average saving rate has been rising over time, with much of the increase taking place in the 2000s, so that the aggregate marginal propensity to save exceeds 50%. What really sets China apart from the rest of the world is that the rising aggregate saving has reflected high savings rates in all three sectors - corporate, household and government. Moreover, adjusting for inflation alters interpretations of the time path of the propensity to save in the three sectors. Our evidence casts doubt on the proposition that distortions and subsidies account for China's rising corporate profits and high saving rate. Instead, we argue that tough corporate restructuring (including pension and home ownership reforms), a marked Lewis-model transformation process (where the average wage exceeds the marginal product of labour in the subsistence sector) and rapid ageing process have all played more important roles. While such structural factors suggest that the Chinese saving rate will peak in the medium term, policies for job creation and a stronger social safety net would assist the transition to more balanced domestic demand.
Book Synopsis House Prices and Household Saving Rate by : Binzhen Wu
Download or read book House Prices and Household Saving Rate written by Binzhen Wu and published by . This book was released on 2013 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the last decade, China's house prices have skyrocketed along with its continually rising household saving rate. Can rising house prices be an important contributor to the increase in household saving rate? Using data from an urban household survey in China, we find that, on average, local house prices do not significantly change household saving rate, regardless of whether housing expenditure is classified as current consumption. When house prices increase, however, households with single male adults, house renters, and owners of homes with below-average value show a significant increase in saving rate. By contrast, households with single female adults and owners of homes with above-average value do not show changes in saving rate.
Book Synopsis Stabilizing China’s Housing Market by : Richard Koss
Download or read book Stabilizing China’s Housing Market written by Richard Koss and published by International Monetary Fund. This book was released on 2018-04-13 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: The sharp rise of house prices in China’s Tier-1 cities has fostered a great deal of commentary about the possibility of bubbles forming there. However, China’s unique housing market characteristics make it difficult to assess the macroeconomic severity of bursting bubbles, even if they exist. These include the setting of land supply and prices by the government, among many others. The presence of overbuilt “ghost cities” greatly complicates the ability of traditional macroeconomic policies to address these concerns. This paper looks at proposals to shore up the mortgage underwriting and legal infrastructure to help China withstand the impact of falling prices, should this occur.
Book Synopsis Can Rising Housing Prices Explain China's High Household Saving Rate? by : Xin Wang
Download or read book Can Rising Housing Prices Explain China's High Household Saving Rate? written by Xin Wang and published by . This book was released on 2015 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: China's average household saving rate is one of the highest in the world. One popular view attributes the high saving rate to fast rising housing prices and other costs of living in China. This article uses simple economic logic to show that rising housing prices and living costs per se cannot explain China's high household saving rate. Although borrowing constraints and demographic changes can help translate housing prices to the aggregate saving rate, quantitative simulations using Chinese data on household income, housing prices, and demographics indicate that rising mortgage costs contribute at most 5 percentage points to the Chinese aggregate household saving rate, given the down-payment structure of China's mortgage markets.
Book Synopsis China's High Saving Puzzle by : Guonan Ma
Download or read book China's High Saving Puzzle written by Guonan Ma and published by . This book was released on 2013 with total page 11 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the causes of rising savings rates for the corporate, government, and household sectors, which have jointly contributed to the upsurge in aggregate savings in China in the past two decades. Government policies to rebalance the Chinese economy are also explored.
Book Synopsis Explaining the Saving Puzzles in Urban China by : Shaojie Zhou
Download or read book Explaining the Saving Puzzles in Urban China written by Shaojie Zhou and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper identifies two saving puzzles obtained from the Chinese Urban Household Survey data from 1990 to 2006. The first saving puzzle is identified by the time trend of household saving rates, which were stable before 1998, but surged subsequently. The second saving puzzle is associated with the various age profiles of household saving rates, which are not only inconsistent with the prediction of the Life Cycle Hypothesis, but also different from the patterns observed in other economies. This paper constructs pseudo-panel data and empirically examines the applicability of the habit-formation model in solving the second saving puzzle through the existence of saving rates and the effects of income-related variables. On the other hand, the parametric changes of such variables help explain the first saving puzzle. The parametric changes possibly stem from the adjustment of habit stock, the rising transitory shocks of income, and the higher expenditure needs for housing.
Book Synopsis Housing Prices, Inter-generational Co-residence, and "excess" Savings by the Young by : Mark Richard Rosenzweig
Download or read book Housing Prices, Inter-generational Co-residence, and "excess" Savings by the Young written by Mark Richard Rosenzweig and published by . This book was released on 2019 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: In many countries of the world the co-residence of young adults aged 25-34 with their parents is not uncommon and in some countries the savings rates of these age groups exceed those of the middle-aged contrary to the standard model of life-cycle savings. In this paper we examine the role of housing prices in affecting the living arrangements of adult family members and their individual savings rates by age. Using unique data from China that enable the re-construction of whole families and identify individual savings regardless of who within the family co-resides in the same household, and exploiting the Chinese government rules determining the supply of land for residential housing, we find that increases in housing prices significantly increase inter-generational co-residence and elevate the savings rates of the young relative to the middle-aged, conditional on income, in part due to the subsidies to the young from sharing housing with parents. Based on our estimates of the effects of housing prices on co-residence and the effects of co-residence on individual savings, we find that the savings rates of the young in China would be 21% lower if housing prices were at the same ratio to disposable incomes as that observed in the United States.
Book Synopsis China and International Housing Price Growth by : Yuk Ying (Candie) Chang
Download or read book China and International Housing Price Growth written by Yuk Ying (Candie) Chang and published by . This book was released on 2018 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: We document Chinese effects on international residential property price growth. We show that faster growth of the housing prices is associated with larger declines in recent past growth of China's GDP, larger increases in China's savings rate, or stronger rise in China's risks. These results are consistent with the notion of Chinese investing in overseas property markets when faced with less promising investment opportunities at home and when they have the means to invest offshore. These effects are stronger for countries where English is the primary spoken language, with better tertiary education quality, and that exhibit lower correlations between local property market price growth and China's interest rate.
Book Synopsis Understanding High Saving Rate in China by : Xinhua He
Download or read book Understanding High Saving Rate in China written by Xinhua He and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents a detailed analysis of the Chinese saving rate based on the flow of funds data. It finds that the most widely adopted view of precautionary saving, which is regarded as the top reason for maintaining a high saving rate in China, is misleading because this conclusion is drawn from the household survey data. In fact, the household saving rate has declined dramatically since the mid-1990s, as is observed from the flow of funds framework. The high national saving rate is attributed to the increasing shares of both government and corporation disposable incomes. Insufficient consumption demand is caused by the persistent decrease in percentage share of household to national disposable income. Government-directed income redistribution urgently needs to be improved to accelerate consumption, which in turn would make the Chinese economy less investment-led and help to reduce the current account surplus.
Book Synopsis Tightening Belts to Buy a Home by : Andrew Waxman
Download or read book Tightening Belts to Buy a Home written by Andrew Waxman and published by . This book was released on 2019 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper measures the impact of housing price changes on household consumption at the city level using the universe of credit and debit card transactions in China from 2011 to 2013. In sharp contrast to the literature on the U.S. housing market, our analysis shows a large and negative housing price elasticity of consumption: a 10% increase in housing prices would lead to a 9.1% reduction in non-housing spending. We argue that the negative elasticity is driven by the combination of a strong investment incentive in housing and heavy borrowing constraints faced by households. This is corroborated by the finding that households increase their savings as housing prices increase. Relative to the existing literature, our analysis helps to better explain how low- and middle-income households adapt to the limited investment venues and surging housing prices in the context of persistently high savings rates.
Book Synopsis Are House Prices Rising too Fast in China? by : International Monetary Fund
Download or read book Are House Prices Rising too Fast in China? written by International Monetary Fund and published by International Monetary Fund. This book was released on 2010-12-01 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: Sharp increase in house prices combined with the extraordinary Chinese lending growth during 2009 has led to concerns of an emerging real estate bubble. We find that, for China as a whole, the current levels of house prices do not seem significantly higher than would be justified by underlying fundamentals. However, there are signs of overvaluation in some cities’ mass-market and luxury segments. Unlike advanced economies before 2007-8, prices have tended to correct frequently in China.Given persistently low real interest rates, lack of alternative investment and mortgage-to-GDP trend, rapid property price growth in China has, and will continue to have,a structural driver.
Book Synopsis Why are Saving Rates of Urban Households in China Rising? by : Marcos Chamon
Download or read book Why are Saving Rates of Urban Households in China Rising? written by Marcos Chamon and published by INTERNATIONAL MONETARY FUND. This book was released on 2008-06-01 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: From 1995 to 2005, the average urban household saving rate in China rose by 7 percentage points, to ¼ of disposable income. We use household-level data to explain the postponing of consumption despite rapid income growth. Tracing cohorts over time indicates virtually no consumption smoothing over the life cycle. Saving rates have increased across all demographic groups, although the age-profile of savings has an unusual U-shaped pattern, with saving rates being the highest among the youngest and oldest households in recent years. These patterns are best explained by the rising private burden of expenditures on housing, education, and health care.
Book Synopsis Why Are Saving Rates So High in China? by : Dennis Tao Yang
Download or read book Why Are Saving Rates So High in China? written by Dennis Tao Yang and published by . This book was released on 2011 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: In this paper, we define â??The Chinese Saving Puzzleâ?? as the persistently high national saving rate at 34â??53 percent of gross domestic product (GDP) in the past three decades and a surge in the saving rate by 11 percentage points from 2000â??2008. Using data from the Flow of Funds Accounts (FFA) and Urban Household Surveys (UHS) supplemented by the findings from existing studies, we analyze the sources and causes of China's high and rising saving rates in the government, corporate, and household sectors. Although the causes of China's high saving are complex, we suggest that the evolving economic, demographic, and policy trends in the internal and external environments of the Chinese economy will likely lead to a decline in national saving in the foreseeable future
Book Synopsis Why are Saving Rates of Urban Households in China Rising? by : Marcos Chamon
Download or read book Why are Saving Rates of Urban Households in China Rising? written by Marcos Chamon and published by . This book was released on 2014 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: From 1995 to 2005, the average urban household saving rate in China rose by 7 percentage points, to about one quarter of disposable income. We use household-level data to explain why households are postponing consumption despite rapid income growth. Tracing cohorts over time indicates a virtual absence of consumption smoothing over the life cycle. Saving rates have increased across all demographic groups although the age profile of savings has an unusual pattern in recent years, with younger and older households having relatively high saving rates. We argue that these patterns are best explained by the rising private burden of expenditures on housing, education, and health care. These effects and precautionary motives may have been amplified by financial underdevelopment, as reflected in constraints on borrowing against future income and low returns on financial assets.
Book Synopsis The Chinese Corporate Savings Puzzle by : Mr.Hui Tong
Download or read book The Chinese Corporate Savings Puzzle written by Mr.Hui Tong and published by International Monetary Fund. This book was released on 2010-12-01 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: China’s high corporate savings rate is commonly claimed to be a key driver for the country’s large current account surplus. The mainstream explanation for high corporate savings is a combination of windfall profits in state-owned firms, especially in resource sectors, and mis-governance of state-owned firms represented by their low dividend payout. The paper casts doubt on these views by comparing the savings of 1557 Chinese listed firms with those of 29330 listed firms from 51 other countries over 2002-07. First, Chinese firms do not have a significantly higher savings rate (as a share of total assets) than the global average because corporations in most countries have a high savings rate. The rising corporate savings rate is also consistent with a global trend. Second, there is no significant difference in the savings behavior and dividend patterns between Chinese majority state-owned and private listed firms, contrary to the received wisdom.
