01863cas a2200241 a 4500 AALejournalIMF011308 230101c9999 xx r poo 0 0eng d 5.00 USD 9781463904258 1018-5941 BD-DhAAL BD-DhAAL Nabar, Malhar. Targets, Interest Rates, and Household Saving in Urban China / Malhar Nabar. Washington, D.C. : International Monetary Fund, 2011. 1 online resource (29 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper studies a panel of China's provinces over the period 1996-2009 during which urban household saving rates increased from 19 percent of disposable income to 30 percent. It finds that the increase in urban saving rates is negatively associated with the decline in real interest rates over this period. This negative association suggests that Chinese households save with a target level of saving in mind. When the return to saving declines (increases), it becomes more difficult (easier) to meet a target and households increase (lower) their saving out of current disposable income to compensate. The results are robust across specifications and to the inclusion of additional variables. A main policy implication is that an increase in real deposit rates may help lower household saving and boost domestic consumption. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2011/223 Full text available on IMF http://elibrary.imf.org/view/journals/001/2011/223/001.2011.issue-223-en.xml IMF e-Library