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

Masao Ogaki, Jonathan Ostry and Carmen Reinhart

IMF Staff Papers, 1996, vol. 43, issue 1, 38-71

Abstract: The relationship between real interest rates, saving, and growth is a central issue in development economics. Using macroeconomic data for a cross-section of countries, we estimate a model in which the intertemporal elasticity of substitution varies with the level of wealth. The estimated parameters are used to calculate, in the context of a simple endogenous growth model, the responsiveness of saving to real interest rate changes for countries at differing stages of development. The hypothesis that the saving rate, and its sensitivity to the interest rate, are a rising function of income finds strong empirical support.

JEL-codes: E21 F41 F43 O11 O16 O57 (search for similar items in EconPapers)
Date: 1996
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Working Paper: Saving Behavior in Low- and Middle-Income Developing Countries: A Comparison (1996)
Working Paper: Saving Behavior in Low and Middle-Income Developing Countries: A Comparison (1995)
Working Paper: Saving behavior in low- and middle-income developing countries (1995)
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