Yangyi Shan's Working Papers

1. Is altruism important for understanding the difference in saving and consumption across countries?

• Abstract:

  To see if cross-country differences in saving and consumption are due to differences in household structure, an overlapping generations framework with two-sided altruism and one-sided altruism is used to study steady-state consumption profiles and capital levels. The economy with two-sided altruism generates a lower saving rate than one-sided altruism. This finding contradicts the empirical facts, as Taiwan, an economy where we can observe many multi-generational households, has higher saving rates than Western developed countries. In contrast, the economy with two-sided altruism generates a flatter consumption profile than the economy with one-sided altruism, which is consistent with the empirical evidence.