Explaining differences in the domestic savings ratio across countries: A panel data study

Hussein, K.A. and Thirlwall, A.P. (1999) Explaining differences in the domestic savings ratio across countries: A panel data study. Journal of Development Studies, 36 (1). pp. 31-52. ISSN 0022-0388. (The full text of this publication is not available from this repository)

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Official URL
http://dx.doi.org/10.1080/00220389908422610

Abstract

This article seeks to analyse the major determinants of differences in the domestic savings ratio between countries using panel data for 62 countries over the period 1967-95, A basic distinction is made between the determinants of the capacity to save and the willingness to save. The capacity to save depends primarily on the Level of per capita income (but non-linearly) and the growth of income (the life-cycle hypothesis), and the empirics strongly support these hypotheses. The willingness to save is assumed to depend on financial variables such as the rate of interest, the level of financial deepening and inflation. We find no support for a positive interest rate effect, but strong support for the level of financial deepening measured by the ratio of quasi-liquid liabilities to GDP. Inflation exerts a mild positive effect on saving but soon turns negative. Total saving may also depend on tax effort but a surprisingly strong negative relation is found between the ratio of tax revenue to GDP and the domestic savings ratio.

Item Type: Article
Subjects: H Social Sciences
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: I.T. Ekpo
Date Deposited: 20 Apr 2009 18:46
Last Modified: 20 Apr 2009 18:46
Resource URI: http://kar.kent.ac.uk/id/eprint/16857 (The current URI for this page, for reference purposes)
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