Skip to main content

The relation between savings and growth: cointegration and causality evidence from Asia

Buy Article:

$47.00 plus tax (Refund Policy)

The direction of causality between savings and growth remains unclear even though it is of critical importance for development policy. In this paper, Granger causality analysis is undertaken for seven Asian countries using the VECM (Engle and Granger) and VAR procedures. We find that in most cases, the direction of causality runs primarily from growth (or income) to savings, although in some countries, there is also evidence of a feedback effect from savings to income and growth. Thus, development policy should focus less on promoting high savings rates and more on promoting high growth rates. Estimation of the savings functions are presented using Engle and Granger's Static OLS and Stock and Watson's dynamic OLS (DOLS) procedures where appropriate. The high savings rates in Asia are found to be due to the high rate of growth of income per capita, declining shares of dependent population, and some special institutional features, such as the high central provident fund rates in Singapore. Interest rates are found to have little impact on savings.
No Reference information available - sign in for access.
No Citation information available - sign in for access.
No Supplementary Data.
No Data/Media
No Metrics

Document Type: Research Article

Publication date: 2001-03-01

More about this publication?
  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more