Saving and growth: a reinterpretation

Christopher Carroll and David Weil

No 1993-36, Working Papers from Brown University, Department of Economics

Abstract: We examine the relationship between income growth and saving using both cross-country and household data. At the aggregate level, we find that growth Granger causes saving, but that saving does not Granger cause growth. Using household data, we find that households with predictably higher income growth save more than households with predictably low growth. We argue that standard Permanent Income models of consumption cannot explain these findings, but that a model of consumption with habit formation may. The positive effect of growth on saving implies that previous estimates of the effect of saving on growth may be overstated.

Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (23)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Saving and growth: a reinterpretation (1994)
Working Paper: Saving and growth: a reinterpretation (1993)
Working Paper: Saving and Growth: A Reinterpretation (1993)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bro:econwp:1993-36

Access Statistics for this paper

More papers in Working Papers from Brown University, Department of Economics Department of Economics, Brown University, Providence, RI 02912.
Bibliographic data for series maintained by Brown Economics Webmaster ().