Saving Across the World: Puzzles and Policies
This paper reviews data showing a direct association between saving ratios and growth rates across countries. Suggests the existence of a virtuous cycle of saving and prosperity along with poverty traps of undersaving and stagnation. It proposes that supply of saving is a central policy objective for reasons other than its direct growth impact. Yet an analytical and empirical basis on which to choose policies aimed at saving is still lacking.
It addresses three broad questions:
- Why do saving rates differ so much across countries and time periods?
- How much do higher saving rates contribute to raising growth?
- What policy measures are the most effective to raise national saving?
Savings performance of various countries are assessed and lessons drawn from actual policy experiences. A policy-oriented synthesis of main research results is provided.
The paper proposes further research methodologies, including how to construct an international macroeconomic data base of saving and related variables.
