 Structural change, savings and current account balanceYi Sun International Review of Economics & Finance, 2011, vol. 20, issue 1, 82-94 Abstract: Private savings have experienced remarkable divergences across countries in recent years. In this paper we use a new factor, economic structural changes, to explain the differences of private savings in developing countries and its impacts on current account balance. We point out that growth related structural changes can be decomposed into productivity changes and job reallocations, which will affect private savings differently through wage effect and labor reallocation effect. Wage variation resulting from productivity growth will increase private savings, while labor reallocation moving from low income to high income sectors will reduce savings. Using sector level data, we find strong empirical evidence that structural change patterns have a significant impact on private savings and current account balance. This result provides another way to understand the recent "savings glut" in East Asian countries and also has some implications for the large current account imbalance issue. Keywords: Economic; growth; Structural; change; Saving; behavior; Current; account; Global; imbalance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:20:y:2011:i:1:p:82-94 Access Statistics for this article International Review of Economics & Finance is currently edited by H. Beladi and C. Chen More articles in International Review of Economics & Finance from Elsevier |
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