University of Chicago
NBER Working Papers and Publications
|February 2017||The Global Rise of Corporate Saving|
with Loukas Karabarbounis, Brent Neiman: w23133
The sectoral composition of global saving changed dramatically during the last three decades. Whereas in the early 1980s most of global investment was funded by household saving, nowadays nearly two-thirds of global investment is funded by corporate saving. This shift in the sectoral composition of saving was not accompanied by changes in the sectoral composition of investment, implying an improvement in the corporate net lending position. We characterize the behavior of corporate saving using both national income accounts and firm-level data and clarify its relationship with the global decline in labor share, the accumulation of corporate cash stocks, and the greater propensity for equity buybacks. We develop a general equilibrium model with product and capital market imperfections to exp...
Published: Peter Chen & Loukas Karabarbounis & Brent Neiman, 2017. "The global rise of corporate saving," Journal of Monetary Economics, vol 89, pages 1-19.