Household Saving in an Era of Financial Turmoil,1975–1984

Abstract

The structure of savings media has changed greatly in the 1975–1984 period. How have savers responded to these changes? The question is answered by an analysis of annual movement of gross and net additions to financial assets held by households in the form of fixed-money claims. Gross financial saving is disaggregated by type of institution and debt securities, and household liabilities are shown by type of debt. Net financial saving as a percentage of disposable personal income yields a savings rate that differs from the rate reported in national income accounts. In the study period, shifts between the various savings media have not been systematically related to yield differentials, a finding that calls for explanation. The article stresses the insights into savers' behavior that can be obtained from the analysis of household financial assets and pleads for greater attention to changes in these assets as a measure of consumer saving.