Saving and Growth: Granger Causality Analysis with Bootstrapping on Panels of Countries
AbstractThis paper investigates the possibility of Granger causality between the saving ratio (the proportion of gross domestic saving in GDP) and the growth rate (annual percentage change of real per capita GDP) in eighty-four countries of the world from 1961 to 2000. For technical reason, on the basis of their per capita GDP in 1995, the countries have been classified as high-income (at least 10000 $US), medium-income (between 1000 and 10000 $US) and low- income (less than 1000 $US) countries, and the three panels of twenty-six, thirty and twenty- eight countries, respectively, are considered separately. Granger causality is tested for with a new panel-data approach based on SUR systems and Wald tests with country specific bootstrap critical values. The results indicate two-way Granger causality between the saving ratio and the growth rate in Austria, one-way causality from saving to growth in Ireland, Trinidad & Tobago and the Central African Republic, and one-way causality from growth to saving in Finland, France, Japan, Sweden, Switzerland and Niger. There is also some support to causality from saving to growth in Mauritania and from growth to saving in Saudi Arabia, but in all other cases there is no empirical evidence of Granger causality in either direction.
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 School of Economics, La Trobe University in its series Working Papers with number 2004.02.
Length: 40 pages
Date of creation: Feb 2004
Date of revision:
causality; saving; economic growth; bootstrapping; panel data EDIRC Provider-Institution: RePEc:edi:smlatau;
Other versions of this item:
- László Kónya, 2004. "Saving and Growth: Granger Causality Analysis with Bootstrapping on Panels of Countries," Working Papers 2004.02, School of Economics, La Trobe University.
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- D90 - Microeconomics - - Intertemporal Choice and Growth - - - General
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- O49 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other
- O5 - Economic Development, Technological Change, and Growth - - Economywide Country Studies
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.:
- Vanhoudt, Patrick, 1998. "A fallacy in causality research on growth and capital accumulation," Economics Letters, Elsevier, vol. 60(1), pages 77-81, July.
- Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250.
- Breuer, Janice Boucher & McNown, Robert & Wallace, Myles, 2002. " Series-Specific Unit Root Tests with Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(5), pages 527-46, December.
- N. Gregory Mankiw & David Romer & David N. Weil, 1992.
"A Contribution to the Empirics of Economic Growth,"
NBER Working Papers
3541, National Bureau of Economic Research, Inc.
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 94(5), pages 1002-37, October.
- Attanasio, O. & Picci, L. & Scorcu, A.E., 2000.
"Saving, growth, and investment: a macroeconomic analysis using a panel of countries,"
Open Access publications from University College London
http://discovery.ucl.ac.u, University College London.
- Orazio P. Attanasio & Lucio Picci & Antonello E. Scorcu, 2000. "Saving, Growth, and Investment: A Macroeconomic Analysis Using a Panel of Countries," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 182-211, May.
- Jody Overland & Christopher D. Carroll & David N. Weil, 2000.
"Saving and Growth with Habit Formation,"
American Economic Review,
American Economic Association, vol. 90(3), pages 341-355, June.
- Christopher D. Carroll & Jody Overland & David N. Weil, 2000. "Mathematica code for 'Saving and Growth with Habit Formation' and 'Comparison Utility in a Growth Model'," QM&RBC Codes 43, Quantitative Macroeconomics & Real Business Cycles.
- Christopher D. Carroll & Jody Overland & David N. Weil, 1995. "Saving and growth with habit formation," Finance and Economics Discussion Series 95-42, Board of Governors of the Federal Reserve System (U.S.).
- Deaton, Angus, 1992. "Understanding Consumption," OUP Catalogue, Oxford University Press, number 9780198288244.
- Sinha, Dipendra & Sinha, Tapen, 1998. "Cart before the horse? The saving-growth nexus in Mexico," Economics Letters, Elsevier, vol. 61(1), pages 43-47, October.
- Holmes, Mark J, 2003. "Are the Trade Deficits of Less Developed Countries Stationary?. Evidence for African Countries," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 3(3).
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- Flavin, Marjorie A, 1981. "The Adjustment of Consumption to Changing Expectations about Future Income," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 974-1009, October.
- Palumbo, Antonella, 1996. "Notes on Investment, Saving and Growth," Contributions to Political Economy, Oxford University Press, vol. 15(0), pages 105-15.
- Iris Claus & David Haugh & Grant Scobie & Jonas Tornquist, 2001. "Saving and growth in an open economy," Treasury Working Paper Series 01/32, New Zealand Treasury.
- Edwards, Sebastian, 1996. "Why are Latin America's savings rates so low? An international comparative analysis," Journal of Development Economics, Elsevier, vol. 51(1), pages 5-44, October.
- Odhiambo, Nicholas M., 2009. "Savings and economic growth in South Africa: A multivariate causality test," Journal of Policy Modeling, Elsevier, vol. 31(5), pages 708-718, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stephen Scoglio).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.