Personal and Corporate Saving in South Africa
AbstractLow domestic saving rates in South Africa may perpetuate a low-growth trap. The decline in government saving, a major reason for the overall decline in saving, is now being reversed. However, personal saving rates have fallen since 1993, and corporate rates since 1995, and both may decline further with lower real interest rates. It is important to understand both personal and corporate saving behaviour in order to formulate policies to raise the domestic saving rate in line with the needs of economic growth. This article summarizes our previous work on the household sector, emphasizing the role of financial liberalization, assets, and income expectations, and it explains sectoral links and policy implications. Further, it analyses South Africa's corporate saving rate in detail. Models are developed both for the share of profits in national income, including the roles of the terms of trade, tax effects, and the price to unit labour cost margin, and for the share of corporate saving in profits, which is found to depend on inflation, the real interest rate, dividend taxation, and financial liberalization. Corporate saving is remarkably underresearched, given its importance in many economies. This research thus puts the saving and growth concerns of Kaldor into a modern empirical context.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2656.
Date of creation: Dec 2000
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Other versions of this item:
- Janine Aron & John Muellbauer & John Muellbauer, 2000. "Personal and Corporate Saving in South Africa," Economics Series Working Papers WPS/2000-21, University of Oxford, Department of Economics.
- Janine Aron & John Muellbauer, 2000. "Personal and corporate saving in South Africa," CSAE Working Paper Series 2000-21, Centre for the Study of African Economies, University of Oxford.
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Feldstein, Martin S, 1970. "Corporate Taxation and Dividend Behaviour," Review of Economic Studies, Wiley Blackwell, vol. 37(1), pages 57-72, January.
- Lucio Sarno & Mark P. Taylor, .
"Real Interest Rates, Liquidity Constraints and Financial Deregulation: Private Consumption Behaviour in the UK,"
Economics and Finance Discussion Papers
97-12, Economics and Finance Section, School of Social Sciences, Brunel University.
- Sarno, Lucio & Taylor, Mark P., 1998. "Real Interest Rates, Liquidity Constraints and Financial Deregulation: Private Consumption Behavior in the U.K," Journal of Macroeconomics, Elsevier, vol. 20(2), pages 221-242, April.
- Jappelli, Tullio & Pagano, Marco, 1992.
"Saving, Growth and Liquidity Constraints,"
CEPR Discussion Papers
662, C.E.P.R. Discussion Papers.
- James G. MacKinnon, 2010.
"Critical Values for Cointegration Tests,"
1227, Queen's University, Department of Economics.
- Bayoumi, Tamim A, 1993. "Financial Deregulation and Consumption in the United Kingdom," The Review of Economics and Statistics, MIT Press, vol. 75(3), pages 536-39, August.
- Aron, Janine & Muellbauer, John, 2004.
"Estimates of Personal Sector Wealth for South Africa,"
CEPR Discussion Papers
4646, C.E.P.R. Discussion Papers.
- John Muellbauer & Janine Aron, 1999. "Estimates of personal sector wealth for South Africa," CSAE Working Paper Series 1999-17, Centre for the Study of African Economies, University of Oxford.
- John Muellbauer & Janine Aron, 1999. "Estimates of personal sector wealth for South Africa," Economics Series Working Papers WPS/1999-17, University of Oxford, Department of Economics.
- R. Glenn Hubbard & Jonathan S. Skinner, 1996.
"Assessing the Effectiveness of Saving Incentives,"
Journal of Economic Perspectives,
American Economic Association, vol. 10(4), pages 73-90, Fall.
- John Y. Campbell & N. Gregory Mankiw, 1989.
"Consumption, Income, and Interest Rates: Reinterpreting the Time Series Evidence,"
NBER Working Papers
2924, National Bureau of Economic Research, Inc.
- John Y. Campbell & N. Gregory Mankiw, 1989. "Consumption, Income and Interest Rates: Reinterpreting the Time Series Evidence," NBER Chapters, in: NBER Macroeconomics Annual 1989, Volume 4, pages 185-246 National Bureau of Economic Research, Inc.
- Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
- repec:fth:harver:1435 is not listed on IDEAS
- James M. Poterba, 1987.
"Tax Policy and Corporate Saving,"
470, Massachusetts Institute of Technology (MIT), Department of Economics.
- Davidson, James E H, et al, 1978. "Econometric Modelling of the Aggregate Time-Series Relationship between Consumers' Expenditure and Income in the United Kingdom," Economic Journal, Royal Economic Society, vol. 88(352), pages 661-92, December.
- Robert E. Hall & Frederic S. Mishkin, 1980.
"The Sensitivity of Consumption to Transitory Income: Estimates from Panel Data on Households,"
NBER Working Papers
0505, National Bureau of Economic Research, Inc.
- Hall, Robert E & Mishkin, Frederic S, 1982. "The Sensitivity of Consumption to Transitory Income: Estimates from Panel Data on Households," Econometrica, Econometric Society, vol. 50(2), pages 461-81, March.
- Oriana Bandiera & Gerard Caprio Jr. & Patrick Honohan & Fabio Schiantarelli, 1998.
"Does Financial Reform Raise or Reduce Savings?,"
Boston College Working Papers in Economics
413, Boston College Department of Economics.
- Roger H. Gordon & Joel Slemrod, 1998. "Are "Real" Responses to Taxes Simply Income Shifting Between Corporate and Personal Tax Bases?," NBER Working Papers 6576, National Bureau of Economic Research, Inc.
- Schmidt-Hebbel, K. & Serven, L., 1997. "Saving Across the World: Puzzles and Policies," World Bank - Discussion Papers 354, World Bank.
- Janine Aron & John Muellbauer, 2000.
"Financial Liberalization, Consumption and Debt in South Africa,"
Economics Series Working Papers
WPS/2000-22, University of Oxford, Department of Economics.
- Janine Aron & John Muellbauer, 2000. "Financial liberalisation, consumption and debt in South Africa," CSAE Working Paper Series 2000-22, Centre for the Study of African Economies, University of Oxford.
- repec:fth:oxesaf:99-17 is not listed on IDEAS
- Geeta Kingdon & John Knight, 2000.
"Are Searching and Non-searching Unemployment Distinct States when Unemployment is High? The Case of South Africa,"
Economics Series Working Papers
WPS/2000-02, University of Oxford, Department of Economics.
- Geeta G. Kingdon & John B. Knight, 2000. "Are searching and non-searching unemployment distinct states when unemployment is high? The case of South Africa," CSAE Working Paper Series 2000-02, Centre for the Study of African Economies, University of Oxford.
- Banerjee, Anindya & Dolado, Juan J. & Galbraith, John W. & Hendry, David, 1993. "Co-integration, Error Correction, and the Econometric Analysis of Non-Stationary Data," OUP Catalogue, Oxford University Press, number 9780198288107.
- Steve Bond & Lucy Chennells & Michael Devereux, 1995. "Company dividends and taxes in the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 16(3), pages 1-18, August.
- Campbell, John Y. & Mankiw, N. Gregory, 1991. "The response of consumption to income : A cross-country investigation," European Economic Review, Elsevier, vol. 35(4), pages 723-756, May.
- Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-87, December.
- David, Paul A & Scadding, John L, 1974. "Private Savings: Ultrarationality, Aggregation, and "Denison's Law."," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 225-49, Part I, M.
- Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.