1. Alternative Measures of Personal Saving
By: Maria G. Perozek* and Marshall B. Reinsdorf**
Survey of Current Business 82 (April 2002):
*Federal Reserve Board
**Bureau of Economic Analysis

3. Recent changes affecting household saving, wealth
Dramatic stock market rise ( March 2000) and fall (March present).
Large changes in net worth, mostly reflecting holding gains.
Marked decline in personal saving from 8.7 percent in 1992 to 2.3 percent in 2001.

4. Interpreting Personal (household) saving
Issues with sector definitions
Defined benefit pension plans
large holding gains can make the plan “over funded,” meaning that the employer is not required to contribute to the plan.
DB plans explain about 1 percentage point of the drop.

6. Consumer durable goods
BEA has measures of consumer durables stocks and net acquisition, based on perpetual inventory model.
Part of decline in saving rate reflected net acquisition of durables

8. Effect of inflation Inflation was mild in USA during 1990s
Because households net lenders, inflation causes saving to be overstated.
Compared with early 1980s, effect is about 2 percentage points.

10. Capital gains taxes
Capital gains are excluded from disposable income but taxes are treated as current taxes.
Growth in capital gains taxes accounts for about 1 percentage point.

12. Measures of wealth accumulation