City Size,Commuting Cost and Household Savings Rate:Evidence from China

Economics literature has long overlooked an important economic phenomenon:Residents in large cities tend to save a smaller percentage of their disposable income than their peers in small and medium-sized cities.As an explanation for this phenomenon,this paper puts forth the hypothesis that:Residents in large cities purchase more services to increase their leisure time,which is reduced by longer commuting time than in small and medium-sized cities,thus lowering their household savings rate.We conducted an empirical study using panel data of China’s prefecture-level cities and urban household survey data,and employed an instrumental variable to address the endogeneity problem.The result confirmed the accuracy of the above hypothesis.In identifying the economic phenomenon and putting forth the hypothesis,this paper(i)creates a theoretical link between city size and household savings rate,which helps unravel the determinants of the urban household savings rate;(2)provides important implications for China’s policy-making on domestic consumption,urban populations,and industrial development.Priority should be given to developing large and medium-sized cities given the positive effects on domestic consumption and service sector development,and migrant labor shall not be barred from entering large and medium-sized cities to provide services to local residents.

China’s High Savings Rate Puzzle:Role of Precautionary Saving

Academics have yet to agree on the effectiveness of the precautionary saving theory in explaining Chinese households’saving behavior.With the Wenchuan megaearthquake of 2008 as an uncertain event to overcome the endogeneity problem of income volatility,this paper puts forward a brand-new hypothesis that"an earthquake influences household saving rate through its effects on expected income and the variance of expected income."Then,we employ propensity score matching-difference-in-differences(PSMDID)method,the systematic GMM methods,the synthetic control method,together with instrumental variable method,for an analysis of Chinese Household Income Project(CHIP)and inter-provincial data at the micro and macro levels,respectively.We find that the Wenchuan mega-earthquake was followed by an increase in the variance of household expected income in Sichuan and a significant rise in the household saving rate.Second,social protection is negatively correlated with expected income,and has a significant substitutive relationship with saving rate.This finding indirectly proves that the earthquake’s impact on the household saving rate is subject to the variance of expected income,shedding light on how the precautionary saving motivation works in the real world.

China’s Rising Labor Remuneration and Evolving National Savings Rate

Cash flow statements suggest that China’s rising labor remuneration has had a major impact on its national savings rate since 2008.Accordingly,this paper proposes labor remuneration hypotheses to explain the evolving trend of China’s national savings rate.We hypothesize that:(1)The certainty and predictability of household labor remuneration have led to excess sensitivity to consumption,with a corresponding decrease in the household savings rate;(2)rising household labor remuneration means a greater share of labor remuneration is paid by firms,resulting in a smaller corporate savings rate;(3)the increase in the payment of labor remuneration by firms as a share of national disposable income has resulted in the government spending more on social welfare and public services resulting in the government having a declining share of disposable income,less propensity to save,and a falling government savings rate.Using China’s provincial panel data of 2008-2016,we performed an empirical test with the minimum wage standard as the instrumental variable to verify the above hypothesis.To cope with economic growth pressures,China needs to shift from an investment-driven to a consumption-driven growth model and prioritize investment efficiency over quantity.

Piketty’s Capital-Income Theory Reconsidered for a Small Open Economy with Increasing Savings Rate

Since Piketty offered a new view of capital/income ratio, numerous attempts have been made to examine the relationship between return on capital, economic growth and the capital/income ratio. This paper attempts to shed new light on this field. More precisely, following recent literatures that pay attention to dynamics of external balance sheets of countries, we examine if Piketty’s results for large countries are robust for a country that takes the world rate of return on capital as given and whose savings rate increases gradually from negative value. It is revealed that for such a country, (1) Kuznets curve is drawn and (2) capital/income ratio decreases in accordance with a rise in savings rate and return on capital.

The Myth of a High Savings Rate

In an attempt to entice consumers to save less and spend more, China has focused on perfecting its social security system, reforming taxation and dividend-sharing proportion between the government and state-owned enterprises. Liu Yuhui, Director of the China Economy Appraisal and Rating Center at the Institute of Finance and Banking, the Chinese Academy of Social Sciences, offered his insights in an Economic Observer article. Edited excerpts

The Effect of Lateral Offset Distance on the Aerodynamics and Fuel Economy of Vehicle Queues

The vehicle industry is always in search of breakthrough energy-saving and emission-reduction technologies.In recent years,vehicle intelligence has progressed considerably,and researchers are currently trying to take advantage of these developments.Here we consider the case of many vehicles forming a queue,i.e.,vehicles traveling at a predetermined speed and distance apart.While the majority of existing studies on this subject have focused on the influence of the longitudinal vehicle spacing,vehicle speed,and the number of vehicles on aerodynamic drag and fuel economy,this study considers the lateral offset distance of the vehicle queue.The group fuel consumption savings rate is calculated and analyzed.As also demonstrated by experimental results,some aerodynamic benefits exist.Moreover,the fuel consumption saving rate of the vehicle queue decreases as the lateral offset distance increases.

Demographic Structure and the Real Exchange Rate:A Study Based on Cross-Country Data

By creating a two-sector intertemporal and intergenerational small open economy model,this paper investigates how real exchange rate responds to demographic shifts in the long term.The result shows that when the capital density of tradable goods sector exceeds that of non-tradable goods sector in a country,an increase in the country's elderly dependency rate(ODR) will cause its real exchange rate to appreciate.In addition,higher savings rate or per capita labor income means that real exchange rate is more responsive to ODR variations.We conducted an econometric test on our theoretical hypotheses using the data of 214 countries and regions during 1980-2013.Empirical result indicates that an increase of ODR will cause real exchange rate to appreciate.This result is robust and unaffected by sample grouping characteristics and differences.An increase in savings rate will significantly increase the ODR elasticity of real exchange rate.This conclusion is also significant and robust for overall samples and categorized samples(except for developed countries) and generally consistent with our theoretical hypothesis.However,our empirical research generally does not support the hypothesis that higher labor income increases the responsiveness of real exchange rate to ODR.This study is of great significance to unravel the effect of China's ageing population on the longterm variations of renminbi's exchange rate.

Water-conducting Characteristics and Micro-dynamic Self-adjusting Behavior of Polyacrylamide/Montinorillonite Coating

A water-conducting polyacrylamide/montmorillonite coating was prepared by solutionblending.The coating was coated on fiber and then composited with polymer to form a composite film material that used for water saving and tree planting in arid and desert regions.The coating＇s water-conducting characteristics and dynamic self-adjusting behavior were investigated by Fourier transform infrared（FTIR）spectroscopy,thermal analysis（TG-DTA）,and environmental scanning electron microscopy（ESEM）.The results showed that the coating＇s water-conducting rate increased but water-retention capacity weakened with increasing montmorillonite content.The water-loss rate was positively related to temperature and negatively related to soil moisture.Water potential greatly influenced the water-conducting rate of the coating during its water conduction process.When the coating was at a low water potential,the montmorillonite particles interconnected and water was conducted quickly via montmorillonite layers,whereas when the coating was at a high potential,the montmorillonite particles disconnected and water was conducted slowly via the swelled polyacrylamide net structure.The rate can be regulated by changing the proportion of polyacrylamide and montmorillonite to guarantee a reasonable water supply for trees and make trees easier to survive.Thus,the survival rate of trees can be increased and the use of water resources can be significantly reduced.

Modeling and performance evaluation of the sleep mode in the IEEE 802.16e wireless networks with self-similar traffic

IEEE 802.16e is currently the latest broadband wireless access standard designed to support mobility. In mobile networks, how to control energy consumption is one of the most important issues for battery-powered mobile stations. The standard proposes an energy saving mechanism named ＇sleep mode＇ for conserving the power of mobile stations. According to the operation principle of the sleep mode for downlink traffic in the type I power saving class, considering the self-similar nature of massive multimedia data in wireless networks, a discrete-time batch arrival Geom^x/G/1 queuing model with a close-down time and multiple vacations is built. The batch size is supposed to be Pareto distributed. By employing an embedded Markov chain method, the average queue length and the average sojourn time of the system model are derived. Correspondingly, the performance measures are obtained of the energy saving rate and the average packet delay time for the sleep mode in the IEEE 802.16e. The numerical results demonstrate the dependency relationships between the system performance measures and the system parameters with different offered loads and different self-similar degrees. Furthermore, a cost model is developed to determine the optimum length of the close-down time for minimizing the total system cost.