The Response of Household Saving to the Large Shock of German Reunification

• 成果类型: Article
• 署名作者: Fuchs-Schundeln, Nicola
• 署名单位: Harvard University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.98.5.1798
• 发表日期: 2008
• 页码: 1798-1828
• 关键词: anticipated income changes; life-cycle; CONSUMPTION EXPENDITURES; equivalence scales; consumer response; GROWTH

摘要

German reunification was a large, unexpected shock for East Germans. Exploiting German reunification as a natural experiment, I analyze the validity of the life-cycle consumption model. I derive three stylized features concerning the saving behavior of East versus West Germans after reunification: (i) East Germans have higher saving rates than West Germans; (ii) this East-West gap is increasing in age at reunification; and (iii) for every cohort, this gap is declining oiler time. I show that a comprehensive life-cycle model can replicate these features. The precautionary saving motive is essential for the success of the model.