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

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Abstract: We estimate the relationship between GDP per capita growth and the growth rate of the national savings 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 savings rate in poor countries (rich countries), and a higher credit-to-GDP ratio decreases the national savings rate as well as the income elasticity of the national savings 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 savings rate.

Date: 2020-12, Revised 2021-06
New Economics Papers: this item is included in nep-cwa, nep-fdg and nep-gro
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http://arxiv.org/pdf/2012.15435 Latest version (application/pdf)

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Journal Article: Transitional dynamics of the saving rate and economic growth (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2012.15435

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