Do the rich save more? A new view based on intergenerational transfers

Research output: Journal PublicationsJournal Article (refereed)peer-review

6 Citations (Scopus)


Do richer people have higher saving rates? The short-run and long-run consumption functions have different answers to this question, which results in the "consumption puzzle" that was a focus of macroeconomic research in the 1950s and 1960s. In a recent empirical contribution, Dynan, Skinner, and Zeldes (2004) revive this old question and make this "consumption puzzle" more intriguing, by showing that the average propensity to consume decreases not only with current income but also with lifetime income. This paper provides a model that helps resolve this puzzle from an intergenerational perspective.
Original languageEnglish
Pages (from-to)362-373
Number of pages12
JournalSouthern Economic Journal
Issue number2
Publication statusPublished - 1 Oct 2006

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