Saving Behavior in Low- and Middle-Income Developing Countries: A Comparison

The relationship between real interest rates, saving, and gre is a cen tral issue in development economics. Using iflaCrOecOnOFflic data for c cross-section of countries, we estimate a model in %i’hlc/I 1/ic intertemporal elasticity of subsutution varies with the level of wealth. The estimated pa ranieters are used to calculate, in the context of a simple endogenous g rowt/i model, the responsiveness of saving to real interest rate c/ian ges for countries at differing stages of developmnent. The hypothesis f/mat the saving rate, and its sensitivity to time interest rate, are a risinq function of income finds strong empirical support.

[1]  Donald O. Mitchell,et al.  The World Food Outlook , 1997 .

[2]  A. Atkeson,et al.  Wealth-varying intertemporal elasticities of substitution: Evidence from panel and aggregate data☆ , 1996 .

[3]  David Wheeler,et al.  Water pollution abatement by Chinese industry: cost estimates and policy implications , 1996 .

[4]  Thomas F. Cooley,et al.  A time series analysis of real wages, consumption, and asset returns , 1996 .

[5]  J. Ostry,et al.  Household Saving in France: Stochastic Income and Financial Deregulation , 1994, SSRN Electronic Journal.

[6]  Michael Sarel.  On the Dynamics of Economic Growth , 1994, SSRN Electronic Journal.

[7]  J. Ostry,et al.  Household Saving in France; Stochastic Income and Financial Deregulation , 1994 .

[8]  Antonio Estache,et al.  World development report 1994 : infrastructure for development , 1994 .

[9]  W. Easterly.  Economic stagnation, fixed factors, and policy thresholds , 1994 .

[10]  A. Ghosh,et al.  Export Instability and the External Balance in Developing Countries , 1994, SSRN Electronic Journal.

[11]  G. Vaidyanathan.  Consumption, liquidity constraints and economic development , 1993 .

[12]  D. Turnham.  Employment and Development: A New Review of Evidence , 1993 .

[13]  Vicente G. Galbis.  High Real Interest Rates Under Financial Liberalization is There a Problem? , 1993, SSRN Electronic Journal.

[14]  Tamim A. Bayoumi.  Financial Deregulation and Household Saving , 1992 .

[15]  J. Frenkel,et al.  Fiscal Policies and the World Economy , 1992 .

[16]  G. Corsetti,et al.  Household saving in developing countries : first cross-country evidence , 1992 .

[17]  Carmen M. Reinhart,et al.  Saving and Terms of Trade Shocks: Evidence from Developing Countries , 1992 .

[18]  Donald W. K. Andrews,et al.  An Improved Heteroskedasticity and Autocorrelation Consistent Covariance Matrix Estimator , 1992 .

[19]  B. Hansen.  Efficient estimation and testing of cointegrating vectors in the presence of deterministic trends , 1992 .

[20]  A. Rose,et al.  An empirical evaluation of the macroeconomic effects of tarrifs , 1992 .

[21]  G. Calvo,et al.  Credit Markets, Credibility, and Economic Transformation , 1991 .

[22]  Carmen M. Reinhart,et al.  Private Saving and Terms of Trade Shocks : Evidence From Developing Countries , 1991 .

[23]  D. Andrews.  Heteroskedasticity and Autocorrelation Consistent Covariance Matrix Estimation , 1991 .

[24]  S. Rebelo,et al.  Long-Run Policy Analysis and Long-Run Growth , 1990, Journal of Political Economy.

[25]  Peter J. Montiel,et al.  Consumption in Developing Countries: Tests for Liquidity Constraintsand Finite Horizons , 1989 .

[26]  A. Deaton,et al.  Saving in Developing Countries: Theory and Review , 1989 .

[27]  K. West,et al.  Asymptotic normality, when regressors have a unit root , 1988 .

[28]  N. Rossi.  Government Spending, the Real Interest Rate, and the Behavior of Liquidity-Constrained Consumers in Developing Countries , 1988 .

[29]  J. Ostry.  The balance of trade, terms of trade, and real exchange rate , 1988 .

[30]  G. Calvo.  Costly Trade Liberalizations: Durable Goods and Capital Mobility , 1987, SSRN Electronic Journal.

[31]  G. Calvo.  On the costs of temporary policy , 1987 .

[32]  Xiaochuan Zhou,et al.  China's banking system: Current status, perspective on reform , 1987 .

[33]  K. L. Gupta.  Aggregate Savings, Financial Intermediation, and Interest Rate , 1987 .

[34]  S. Edwards,et al.  Anticipated Protectionist Policies, Real Exchange Rates and the Current Account , 1987 .

[35]  J. Frenkel,et al.  Fiscal policies and the world economy: An intertemporal approach , 1987 .

[36]  J. Frenkel,et al.  Fiscal Policies in the World Economy , 1986, Journal of Political Economy.

[37]  J. Tybout,et al.  The Effects of Financial Liberalization on Savings and Investment in Uruguay , 1986, Economic Development and Cultural Change.

[38]  A. Giovannini.  Saving and the real interest rate in LDCs , 1985 .

[39]  S. Wijnbergen.  Interest rate management in LDC's , 1983 .

[40]  A. Razin.  The Terms of Trade and the Current Account: The Harberger-Laursen-Metzler Effect , 1983, Journal of Political Economy.

[41]  L. Hansen,et al.  Generalized Instrumental Variables Estimation of Nonlinear Rational Expectations Models , 1982 .

[42]  R. Hall.  Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence , 1978, Journal of Political Economy.

[43]  Brian F. Blake,et al.  Pitfalls and Opportunities , 1978 .

[44]  A. Sen,et al.  Employment, Technology and Development , 1975 .

[45]  D. C. Cole,et al.  Financial Deepening in Economic Development. , 1974 .

[46]  R. Mckinnon,et al.  Money and Capital in Economic Development , 1974 .

[47]  L. D. Stamp,et al.  The Economics of the Developing Countries , 1965 .

[48]  A. Cairncross.  Problems of Capital Formation. , 1959 .

[49]  M. Bailey.  Saving and the Rate of Interest , 1957, Journal of Political Economy.

[50]  M. Ogaki,et al.  A cointegration approach to estimating preference parameters , 1997 .

[51]  Carmen M. Reinhart,et al.  Saving Behavior in Low and Middle-Income Developing Countries; A Comparison , 1995 .

[52]  Carmen M. Reinhart,et al.  Intertemporal consumption substitution and inflation stabilization:An empirical investigation , 1994 .

[53]  Masao Ogaki,et al.  17 Generalized method of moments: Econometric applications , 1993 .

[54]  Carsten A. Holz.  The role of central banking in China's economic reforms , 1992 .

[55]  M. Ogaki,et al.  Inference in Cointegrated Models Using VAR Prewhitening to Estimate Shortrun Dynamics , 1991 .

[56]  P. Romer.  CAPITAL ACCUMULATION IN THE THEORY OF LONG RUN GROWTH , 1988 .

[57]  Wang Weicai.  China's economic and financial reform , 1984 .

[58]  Lars E. O. Svensson,et al.  Trade taxes and the current account , 1983 .