Barry Bosworth discusses the issue of saving generally, and relates it to income growth, demographics, and other factors in his book Saving and Investment in a Global Economy (Brookings, 1993). His study includes Japan and a number of other countries. The issue is also discussed in IMF occasional paper 124, Saving Behavior and the Asset Price Bubble in Japan. Kazuo Sato's article "Saving and Investment" in Yamamura and Yasuba, The Political Economy of Japan, volume 1, is also good. The notes and bibliographies in these readings are a good starting point for exploring the voluminous literature on saving in Japan.

With regard to the relationship between income growth and the rate of saving, the literature on saving generally says it depends somewhat on expectations. If households expect income to rise, they will tend to save less. If they are surprised each year as their incomes increase, they may save more (I suspect this may have happened in Japan until the 60sor so).

Regards, Jim

James A. Kilpatrick
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