Saving Transitions

Dani Rodrik

The World Bank Economic Review, 2000, vol. 14, issue 3, 481-507

Abstract: This article takes a systematic cross-national approach to identifying saving transitions-defined as sustained increases in the saving rate of 5 percentage points or more-to study their determinants and to reexamine the question of causality between growth and saving. Countries that undergo saving transitions do not necessarily experience sustained increases in their growth rates. In fact, growth rates typically return to their levels before the transition within a decade. By contrast, countries that undergo growth transition-arising from improved terms of trade, increased domestic investment, or other sources-do end up with permanently higher saving rates. Hence saving transitions do not appear to be causal with respect to superior economic performance. Copyright The Author 2000. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / the world bank . All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org, Oxford University Press.

Date: 2000
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