Transitional dynamics of the saving rate and economic growth

Date

2021

Authors

Brueckner, Markus
Kikuchi, Tomoo
Vachadze, George

Journal Title

Journal ISSN

Volume Title

Publisher

Cambridge University Press

Abstract

We estimate the relationship between GDP per capita growth and the growth rate of the national saving rate using a panel of 130 countries over the period 1960-2017. We find that GDP per capita growth increases (decreases) the growth rate of the national saving rate in poor countries (rich countries), and a higher credit-to-GDP ratio decreases the national saving rate as well as the income elasticity of the national saving rate. We develop a model with a credit constraint to explain the growth-saving relationship by the saving behavior of entrepreneurs at both the intensive and extensive margins. We further present supporting evidence for our theoretical findings by utilizing cross-country time series data of the number of new businesses registered and the corporate saving rate.

Description

Keywords

Economic growth, saving rate, credit constraints, entrepreneurs

Citation

Source

Macroeconomic Dynamics

Type

Journal article

Book Title

Entity type

Access Statement

Open Access

License Rights

Creative Commons Attribution licence

DOI

10.1017/S1365100521000493

Restricted until