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BPEA Article

The Measurement and Determination of Loanable-Funds Saving



WHILE there may be many reasons to be concerned about what determines the flow of saving in the U.S. economy, it is the role of saving as the supply side in the process of capital accumulation that seems to lie at the heart of the renewed interest in saving behavior in recent literature. That same view of saving is the focus of our attention and guides the choices we make in the empirical analysis presented here. Our major objective is to investigate the proposition that saving—in the sense of the flow of resources available for capital formation, or "loanable funds"—is determined in part by the rate of interest.


John B. Shoven

Charles R. Schwab Professor of Economics - Stanford University, and NBER

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