ERI Discussion Paper Series No.56
The Past and Future Patterns of Investment and Saving in Japan

October 1993
Shoichi Kojima
(Deputy Director-General, Economic Research Institute, Economic Planning Agency)


The paper takes both theoretical and descriptive approaches to deepen the understanding on the patterns of investment, saving and current account imbalances in Japan and the rest of the world. A two-country, intertemporal model is presented and the differences in the fundamental parameters such as the rates of time preference and productivity growth are emphasized as the basic cause of current account imbalances by affecting investment and saving patterns of both countries. Then investment and saving pattern in Japan is described sector-wise, i.e. for corporates, household and general government both from real and financial points of view. A broadly stable saving rate in relation to disposable income, conbined with social security fund build-up from 1960s, is pointed out as an important cause of excess of saving over investment for a nation as a whole. It concludes with the need for the economic reform which expands consumption and welfare-improving investment in Japan.

Structure of the whole text

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  2. page1
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  4. page3
    1. A two-country, intertemporal model of investment,saving and current account imbalances
    1. page3
    2. page4
      (2)The Model
    3. page6
    4. page7
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    2. Salient features of invetsment and saving patterns in Japan
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      (1)Output growth
    2. page12
      (2)Corporate behaviors
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      (3)Household behaviors
    4. page15
      (4)General government behaviors
    5. page17
      (5)Behaviors of the current account
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    3. Issues on the future patterns
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