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Savings Determinants in Colombia: 1925-1994

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  • Andrés Escobar
  • Mauricio Cardenas

Abstract

This paper analyzes the determinants of savings in Colombia using the framework of an intertemporal model. National saving partially responds to temporary changes in output, according to the permanent income hypothesis. Higher government expenditures (in relation to their permanent level) are associated with lower national saving, refuting the existence of Ricardian equivalence. The paper also tests other common hypotheses in regard to saving behavior. In particular, we find that changes in national savings and changes in investment are perfectly correlated, and that savings cause growth (in the Granger sense). The results also indicate that increases in urbanization and age dependency have had a significantly negative effect on private savings in Colombia. Finally, we find that much of the recent reduction in private savings can be accounted for by the increase in current government consumption, as well as by the effects of higher taxation.

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Bibliographic Info

Paper provided by Inter-American Development Bank, Research Department in its series Research Department Publications with number 3009.

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Date of creation: Sep 1997
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Handle: RePEc:idb:wpaper:3009

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Citations

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Cited by:
  1. Loumrhari, Ghizlan, 2013. "Vieillissement démographique, longévité et épargne. Le cas du Maroc
    [Ageing population, longevity and save. The case of Morocco]
    ," MPRA Paper 50649, University Library of Munich, Germany.
  2. Adenutsi, Deodat E., 2010. "Financial development, bank savings mobilization and economic performance in Ghana: evidence from a multivariate structural VAR," MPRA Paper 29571, University Library of Munich, Germany.
  3. Quartey, Peter, 2005. "Financial Sector Development, Savings Mobilization and Poverty Reduction in Ghana," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) RP2005/71, World Institute for Development Economic Research (UNU-WIDER).
  4. Lavan Mahadeva & Javier Gómez Pineda, 2009. "The international cycle and Colombian monetary policy," BORRADORES DE ECONOMIA 005406, BANCO DE LA REPÚBLICA.
  5. Omar Masood & Priya Darshini Pun Thapa & Olivier Levyne & Frederic Teulon & Rabeb Triki, 2014. "Does Co-integration and Causal Relationship Exist between the Non- stationary Variables for Chinese Bank’s Profitability? An Empirical Evidence," Working Papers 2014-249, Department of Research, Ipag Business School.
  6. Kelly, Roger & Mavrotas, George, 2003. "Financial Sector Development - Futile or Fruitful? An Examination of the Determinants of Savings in Sri Lanka," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  7. Ghizlan Loumrhari, 2014. "Ageing, Longevity and Savings: The Case of Morocco," International Journal of Economics and Financial Issues, Econjournals, vol. 4(2), pages 344-352.
  8. Mondher bellalah & Olivier Levyne & Omar Masood, 2013. "Does co-integration and causal relationship exist between the non-stationary variables for Chinese bank’s profitability? Empirical evidence," THEMA Working Papers 2013-14, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.

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