Journal Article

Saving Transitions

Dani Rodrik

in The World Bank Economic Review

Published on behalf of World Bank

Volume 14, issue 3, pages 481-507
Published in print September 2000 | ISSN: 0258-6770
Published online September 2000 | e-ISSN: 1564-698X | DOI: http://dx.doi.org/10.1093/wber/14.3.481
Saving Transitions

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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 transitions—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.

Journal Article.  0 words. 

Subjects: Development Planning and Policy

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