Does New Zealand have a household saving crisis? NZIER working paper 2007-01
October 10, 2007
There is a lot of public concern over household saving in New Zealand. Rising household debt, negative and declining household saving rate, persistent and large current account deficit, heavy reliance on foreign borrowing, “worst savers in the OECD” or claims of similar spirits have recurred over the last decade.
In light of the conflicting views on household saving, this paper seeks to synthesise what is known about the measurement of household saving in New Zealand and to reconcile the debate on the existing evidence.
The paper focuses on saving by households. But since the household sector is interrelated with the business and government sectors, where applicable household saving will be examined in conjunction with saving by the other sectors.