Transitional dynamics of the saving rate and economic growth

Markus Brueckner, Tomoo Kikuchi and George Vachadze
Authors registered in the RePEc Author Service: Markus Brueckner

Macroeconomic Dynamics, 2023, vol. 27, issue 2, 482-505

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.

Date: 2023
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Working Paper: Transitional Dynamics of the Saving Rate and Economic Growth (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:cup:macdyn:v:27:y:2023:i:2:p:482-505_9

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