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FIGURE 7-1  Components of household real net worth, 1960–2010 (in 2005 dollars). SOURCE: Federal Reserve (2011).

50 years, averaging 3.5 percent annually and experiencing only 11 years of decline. Figure 7-1 suggests that growth in net wealth is correlated with the real business cycle.

National Saving Patterns

To effectively discuss saving and the impact of an aging society on saving, the committee distinguishes between private and government saving. The portion of a nation’s income not used for consumption is the sum of both kinds of saving, and it is termed national saving. In the United States, national saving and its component parts are typically measured using data from the National Income and Product Accounts (NIPA) drawn from the Bureau of Economic Analysis (BEA) (2011). Figure 7-2 shows the relationship between U.S. net private and public saving and net national saving over the past half-century. The evidence indicates that net national saving as a percent of U.S. gross domestic product (GDP) has declined in the last half-century, and this decline is attributable to declines in both private and government saving. A discussion of different saving concepts is provided in the attachment to this chapter.

The BEA defines private saving as the sum of business and personal saving, where “personal” includes not just households but also nonprofit



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