Robert Shiller thinks that people ought to be saving more.

According to a recent study by the Organization for Economic Cooperation and Development (OECD), household saving rates declined between 1984 and 2001 in Australia, Austria, Belgium, Canada, Finland, Italy, Japan, Korea, New Zealand, Portugal, Spain, the United Kingdom, and the United States. In some countries, the decline has been dramatic: in the US during this period, the annual household saving rate – expressed as the share of disposable income – fell from 10.6% to 1.6%.

He cites a study which argues that people save more when inflation is higher. One reason for this in the United States is that level-payment mortgages force people to accumulate equity faster in an inflationary environment.

For Discussion. What other factors have economists used to try to account for the decline in the personal saving rate over the past twenty years?