Some thoughts on Japanese Savings Rate
The comparative analysis of ability to save is not my specialty. I have done no empirical research in the area, although in my never-ending quest to "keep up" with Japan, I do read the occasional article, such as the one that appeared in ECONOMIC DEVELOPMENT AND CULTURAL CHANGE last year.
What surprises me about the exchange that has been going on, however, is that NO ONE has yet mentioned the structure of the Japanese pension system and its relationship to the savings rate. Many Japanese workers receive large, lump sum payments upon retirement, which they place in numerous bank accounts (for tax purposes, I believe) in order to obtain some extra income from interest. The urgency for doing so is compounded by the fact that Japanese social security payments are not very generous. This is a fact that is often ignored in all the "macro" debates about interest rates and growth -- every time Japanese interest rates decline, many Japanese elderly who are living "on the edge" financially take another hit in their income, and many Japanese elderly do NOT live with their children any longer.
Comments, anyone?
Ray Jussaume
Washington State University