Saving, Investment and Growth: A Causality Test
AbstractAll agree to the answer, i.e., they agree that accumulation of capital was, is, and will remain the most significant problem of the third world (the south) countries. The third world countries cannot accumulate capital because of low-income levels, which in turn, leads to low saving and investments. But low saving and hence low investments are responsible for low income. A catch 22 problem for the third world countries that is badly in need of solutions. This paper shows that we could conclude a one-way Granger causalities running from savings to investment, and from disposable income to investment. This is true with one or more lagged values as independent variable. This means, we need undertake policies that foster savings to spur investment, and as a result, capital accumulation.
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 University Library of Munich, Germany in its series MPRA Paper with number 26806.
Date of creation: 2006
Date of revision: 2006
Publication status: Published in Iranian Economic review 16.11(2006): pp. 165-175
Granger causalities; Iranian saving and investment and economic growth;
Find related papers by JEL classification:
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
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.:
- Deepak Lal, 1993. "Poverty and Development," UCLA Economics Working Papers, UCLA Department of Economics 707, UCLA Department of Economics.
- Martin Feldstein, 1994.
"Tax Policy and International Capital Flows,"
NBER Working Papers
4851, National Bureau of Economic Research, Inc.
- Martin Feldstein, 1994. "Tax policy and international capital flows," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 130(4), pages 675-697, December.
- Lucian Cernat & Radu Vranceanu, 2002. "Globalisation and Development: New Evidence from Central and Eastern Europe," Comparative Economic Studies, Palgrave Macmillan, vol. 44(4), pages 119-136, December.
- Zangeneh, Hamid, 2010. "Iran: Past, Present and the Future," MPRA Paper 26283, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.