RISE AND FALL OF THE JAPANESE SAVING RATE - THE ROLE OF SOCIAL-SECURITY AND INTRA-FAMILY TRANSFERS

Alternative models of household saving behaviour are tested using Japa nese post-war time series data. Basic life-cycle theory and models bas ed on some form of intergenerational altruism are rejected in favour o f an extended life-cycle model based on the assumption of strategic se lf-interest. The early rise and subsequent fall of the saving rate is explained by the interaction of state, capital market and extended fam ily as providers of old-age social security.