On the demand side, older people tend to dissave
, putting upward pressure on the interest rate; while younger people, expecting to live longer, save more, putting downward pressure on interest rates.
Finally, when households enter the retirement phase, they dissave
, dipping into their accumulated wealth to fund consumption.
As many people who have looked at the data have pointed out, it turns out that a lot of retired people actually save rather than dissave
038, and no effect of year on negotiate, borrow, dissave
found that not only did older Americans not dissave
to finance their consumption during retirement, but they also spent less on consumer goods and services than did nonelderly people at all levels of income.
During youth and retirement age, individuals will dissave
, and saving will occur while an individual is productive in his middle age.
One reason was that rising stock markets and higher house prices made individuals wealthier, reducing their need to save for retirement and allowing retirees to dissave
The long-term decline in savings in advanced countries can be explained by the following factors (IMF, 2005): increased access to credit facilitated by financial market innovation; the decline in public savings in some advanced economies such as the US; and an increase in the elderly dependency ratio, where an aging population tends to dissave
If the public sector does not dissave
and corporate savings remain at the current level of 8 percent, India's gross domestic savings rate could well be 38-40 percent over the next two decades.
t] = [beta], our representative agent does not have incentives to save or dissave
and, as a result, consumption is constant.
Workers might well respond by increasing savings, but the retired might not dissave
as much as one would normally expect.
According to Modigliani's  life-cycle theory, economic agents tend to engage in active saving while they are working and to begin to dissave
(or a negative saving) when they retire (around age 65 or greater).