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I will make an insightful comment this evening.


actually German savings are not high,
even the savings rate is just mediocre.

Keeping in mind, that Germans invest less in stock, this is understandable.

Please see OECD data on total stock of savings.

Being aware that home ownership in Germany is only 43%, we actually had a private debt problem around 2000 ! 10 % of the population are close to bankruptcy.

With the reduction of the "net replacement rate" for public pension, we actually have to nudge German people a little higher on the savings.

Some comments from the linguistics community:


Reply by Chen

More from linguists:

"I'm going jogging tomorrow morning."

Let's hear it for the present progressive! ;)

"I go jogging every morning."

Let's hear it for the indicative! :)

"I jog."

The so-called present tense. ;)

And lest we forget:

"Jesus saves."


genauer - I hadn't thought of that point, i.e. that the definition of retirement assets can be someone problematic, but of course you're right.

Min - excellent.

Brett - yup, I saw this on language log first. I don't even know if posts like this one, which are basically pretty derivative, belong on WCI. Hopefully it will entertain a few of you, and the quality of comments so far shows that people have something to say on the subject.

Genauer also illustrates that the rate of home ownership skews the definition of "savings". English-speaking countries have very high rates of home ownership and very liquid mortgage markets; people value their homes as assets. This means they don't have high balances in savings accounts or bank paper. The definition of "savings" doesn't capture the range of behaviour, in my opinion.

Or in Canada contrast Montreal to Toronto. Montreal has a very high rate of renting and a low direct ownership rate compared to Toronto, it is the only major city in Canada with a majority of renters.

To get even more exotic, I was in Greece on vacation ten years ago and was told that Greece also has a very high rate of ownership. But it isn't like Canada. Mortgages are hard to get so people own their ancestral home in the country and rent a place where they live and work, they'll often rent out the estate while they're gone. All to avoid an actual sale. So in Greece you get a case where rental income must be netted against rental expenses for many households.


there are no public pension assets in Germany, it is all paygo.

since a lot of the OECD stuff is moving, and you should find your way around, go for "Household Wealth" Data, and there was an interesting report 3 years ago about Asian pension systems, with good comparisons to many western countries.
Part of the explanation for high chinese,, and formerly high japanese savings are lower pension rates.
Old Modigliani Paper 1954 Life Cycle Hypothesis,
and how that relates to growth rates, etc.

my entry point into macro economic interest : - )
German and Japanese timing,
US savings rate vs SSI means testing (Change in 2000) and feeled wealth,
pretty much kills the language argument.

genauer, I take your points, and agree that there are serious limitations to cross country regressions.

But what's the response to Chen's regressions that compare weak-FTR and low-FTR speakers within the same country, e.g. Switzerland or Singapore? What about the findings for smoking and obesity? They aren't dismissed so easily.

Not sure of the proper terminology, so bear with me... Did Chen 'control' for the fact the groups of people living in a country are often not equal? For example, what happens if you take income levels into account? Are some of the sub-groups in a country privileged relative to others? I'm sure one could show all sorts of unflattering things about e.g. African Americans relative to Americans of European decent, but we'd rightly be very careful - and not just for reasons of political correctness - about making causal links to race.

It would also be interesting to see the results for the same study done for different time periods. Would 19th century Britain be the same? Would 1970's US?

Patrick - yup, comparing speakers of different languages is the same country is not a totally unproblematic fix. E.g. one of the countries Keith Chen looks at is Belgium - and, yes, there are issues there. It's like comparing French and English speakers in Canada - there are so many other factors that are confounded with language e.g. provincial policies, religion, ethnicity, age...


you wanna save the paper ... good !

YOu actually make me look up his paper again, and he actually has the Modigliani LCH in it, the Social security too. Can he get his hands on total savings data ? Could be interesting, it could also play to the permanent income hypothesis ..... : - )

But just take a look at Figure 2. In the moment you take out Luxembourg as a poster boy of a small special country, well, and Greece for being Greece, this correlation breaks down completely (in a sense of: my gut feeling would be t=1- 1.5).

y-axis typo GDP, Japan 28% ??? they have a negative private rate now, and notorious state deficits, what is plotted exactly here ?

Singapore is a clear case of cultural / religious and massively correlated social differences, the malay came in poor, the chinese and europeans rich, and they dont mix well. I know the story from both sides : - )

Belgium also has some social / time dependent dynamic. (Hey, this could be looked at !!!!)

Switzerland is a tougher cookie. But I dont see this detailed enough here.

to go into more details with BE & CH might be worth it

NB Wittgensteins Clarinet, interesting read.

Fig. 1: this is just noise, no matter how he calculated his t
not good

Health data
Table 6, Standard errors to good to be true, please check
(Which economics nobel price winner made the same mistake ? .... : - )

While the research seems to be interesting I am not that convinced that this strong/weak future tense is that important. At least not in German. First, germans do construct future tense quite similarly to the way it is done in english. Basically (setting aside other small differences) instead of the word "will" tey use the german word "werden". While thay may construct future tense using present form of the word, the very same examples can be actually found also in English (I believe). For instance, german "Wir sehen uns morgen" can be litelary translated as "See you tomorrow". I could swear that I heard this phrase many times from native english speakers. Or you may say "Let's have a dinner together tonight". I would not be surprised if there are more such phrases used in english, as it spoken by children of emigrants often speaking those weak-FTR languages as their mother tongue.

Seems rather specious to me. More likely that culture influences language than vice versa. People make up new words all the time, and they happily break grammatical rules to say what they mean. Perhaps there is some interaction with language that tends to entrench cultural norms, but putting language first in these matters is a big no-no for all kinds of reasons.

In response to the various comments - like I said earlier, the more I think about what I would conclude from large coefficient on a "french" dummy on a regression using any Canadian data, the more I wonder about these results. But I do think they're interesting to think about.

Some of these effects of language on behaviour are quite robust. E.g. different languages have different ways of breaking up the colour spectrum. So Russians, for example, treat light blue and dark blue as different colours, whereas English speakers regard them as two shades of the same colour. This actually makes a difference to the way that people perceive and recall colour in experimental situations. Then there's the way that Germans and French speakers use different words to describe bridges- if the word for bridge is feminine, people are relatively more likely to describe bridges as, say, elegant, whereas if the word for bridge is masculine, people will describe bridges more often as, say, strong.

Could language play a role in reinforcing, transmitting and strengthening cultural attitudes? That doesn't sound so far fetched to me.

I should make my primary argument shorter and more clear:
Savings, savings rate and public pension depend primarily on where a country stands on the development curve, high savings are needed during the rise, not before and not after. And if this is then primarily only dependent on the timing, it can neither be culture nor language dependent.

It somebody would have truly higher saving rates for ever, they would accumulate a much higher working capital (minus private houses), which is not the case, it is always about 2.5 - 3.3 GDP.

Whorfism strikes back! ( you can't think about inventing the telephone if you don't have a word for it...).Funny that linguists have long buried that idiocy. Stephen Pinker's The language instinct should have ended the farce.
Renters in Montreal? Most stats look at the island or the municipality, equivalent to Manhattan say. When you include the 450 ( bridges & tunnels for the mericans readers) of the "1ère and 2ème couronnes" ( 1st and 2nd crowns as we say in Qc), data revert to the norm adjusted for income and so on.

This is ridiculous. East Asians have probably the highest rate of savings but Chinese language, for example, makes no distinction between present and the future. It rain yesterday; it rain today; it rain tomorrow. There is no such as tense but to describe something happening tomorrow, you use a modifier. ie. Tomorrow, it rain. Two years ago, it rain. I think this study is just plain silly.

Rene Descartes: "East Asians have probably the highest rate of savings but Chinese language, for example, makes no distinction between present and the future"

That's the point - Chen is arguing that this feature of the Chinese language makes people save more.

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