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Household Savings Decisions and Institutional Development: The Case of Rural Households in China

  • Hisatoshi Hoken
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Part of the IDE-JETRO book series (IDE)

Abstract

Household savings decisions are key factors in determining the stability and development of an economy. Higher household savings contribute to stable macroeconomic development, particularly in the transition process from a planned economy to a market economy. Institutional settings essentially determine whether or not stability can be accomplished. In China’s planned economy, economic surplus was strictly controled by government planning and the living standard of households were kept artificially low. Households could only afford marginal expenses, and household savings decisions did not work. Those systems were maintained by state-owned enterprises (SOE) in urban areas and by peoples’ communes in the rural regions.

Keywords

Portfolio Selection Rural Household Cash Holding Percentage Share Permanent Income 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Institute of Developing Economies (IDE), JETRO 2006

Authors and Affiliations

  • Hisatoshi Hoken

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