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Household Net Wealth: An International Comparison - WP 01/19

Publication Details

  • Household Net Wealth: An International Comparison
  • Published: Dec 2001
  • Status: Current
  • Authors: Claus, Iris; Scobie, Grant M
  • JEL Classification: E21; N20
  • Hard copy: Available in HTML and PDF formats only.
 

Household net wealth: an international comparison

New Zealand Treasury Working Paper 01/19

Published: 2001

Authors: Iris Claus and Grant Scobie

Abstract

Household saving can be measured as either the difference between the flows of current income and expenditure, or through households’ balance sheets as changes in the stocks of accumulated net wealth. This paper examines household saving in New Zealand and other OECD countries, with particular focus on the stock of net wealth. The ratio of real assets to disposable income in New Zealand is close to OECD levels. However, household financial net wealth as a proportion of disposable income has been falling in New Zealand since the late 1980s, whereas it has been rising in other OECD countries. As a result, housing assets in New Zealand have become an increasing share of households' wealth portfolios. The implied savings rate from households’ balance sheets is significantly higher than the flow measure. Moreover, it follows the business cycle more closely, consistent with consumption smoothing behaviour by households.

Table of Contents

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Abstract

Contents

1 Introduction

2 Definitions and measures of saving

3 The link between the flow and stock measures of household saving

4 Household saving and net wealth in New Zealand

5 A comparison with other OECD countries

6 Financial liberalisation and Housing wealth

7 Concluding remarks

References

twp01-19.pdf (205KB) pp. 29

List of Tables

List of Figures

Acknowledgement

The authors would like to thank Bob Buckle, Wai Kin Choy, Lesley Haines, Roger Hurnard, Struan Little, Jas McKenzie, David Skilling, Clive Thorp and Bruce White for valuable comments. This paper has also benefited of comments from participants at a Treasury seminar and the New Zealand Association of Economists conference in Christchurch, June 2001.

Disclaimer

The views expressed in this Working Paper are those of the author(s) and do not necessarily reflect the views of the Treasury. The paper is presented not as policy, but with a view to inform and stimulate wider debate.

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