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

Carmen Reinhart (), Masao Ogaki and Jonathan David Ostry ()

MPRA Paper from University Library of Munich, Germany

Abstract: 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.

Keywords: low income; subsistence consumption; saving; real interest rates (search for similar items in EconPapers)
JEL-codes: E2 F3 F1 (search for similar items in EconPapers)
Date: 1996-03
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Published in IMF Staff Papers 1.43(1996): pp. 38-71

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http://mpra.ub.uni-muenchen.de/6978/

Related works:
Working Paper: Saving Behavior in Low- and Middle -Income Developing Countries: A Comparison (1995)
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