Household Saving Behavior And Economic Growth In Economic Transition

Since the transition from planned economy to market economy in China, household high saving has drawn attention among the theoretical circles and government. How to view the household saving behavior in transitional period? IS household saving too much? These questions are important should be studied and solved.From historical and system point, we should explain two questions:Firstly, why is household saving rate too high since transition? Only by answering this question, we can explain the tread of household saving and if household saving can be reduced; Secondly, what is the role of household saving in the 30years since transition from macroeconomic point? By answering this question, we can explain if we should reduce household saving.This dissertation studies on household saving, using the interaction between institution change and economic growth as background. Based on relationship of institution, household saving behavior and economic growth, this dissertation expand along the outline of institution change-household saving behavior-economic growth. On the basis of two fundamental assumptions those are institution man and asymmetric relationship between institution and behavior, this dissertation builds up a studying framework named as IBP(institution-behavior-performance), using SCP paradigm in industrial economics as a reference. Household saving behavior is complexity and diversity, because it is impacted by internal and exterior factors. This dissertation studies the role of institution change to household saving behavior from exterior and interior factors. On household saving's role mechanism on economic growth, scholars'researches are only on promoting investment or inhibiting consumption。To China duration economic transition, the role of household saving is far more than that. This dissertation holds the views that household saving played a crucial role in economic stability of the transition, including self supply effect of social safeguard and financial stability effect. Taking into account the lower income of Chinese household, undeveloped credit, household has to accumulate savings in advance, in order to cope with housing, education, consumer durables and other large consumer, then showing a saving-large consumption-saving-large consumption behavior, so we think that household saving's role in promoting economic growth include saving-consumption switching effect.and effect of capital formation,In order to verify the exact relationship between economic growth and household saving, this dissertation uses econometrics software on both cointegration and causality test. It shows there is the cointegration relationship between GDP and household savings, two-way causality is established. Impulse response and variance decomposition analysis shows that the household saving rate on economic growth is positive and increasing. On the whole, household saving has contribution to economic growth. But over time, the impact of household saving rate on economic growth is declining.This dissertation draws out the evaluation criteria for determining whether household saving behavior is reasonable standard by the micro-and macro-criteria. Micro-criteria is household utility maximization, macro-criteria is macroeconomic growth. In theory, there is an optimal value household saving based on the scale of economic growth. This study shows that throughout the transition economy, the optimal size of household saving is 14.95%, so we conclude that household saving in transition is not over but insufficient. Appropriately increasing the household saving rate is to achieve stable and rapid economic growth in an important way. This dissertation proposes two policy recommendations:firstly, government should increase household income by adjusting the income distribution system; secondly, conduct a certain degree of compulsory saving to develop social security system.