The private and public savings gaps in Malta and their impact on the current account
AbstractAny difference that arises between the level of domestic saving and investment is reflected in the nation's current account position. Both domestic saving and investment can be sub-divided into private and public sector components, and gaps between these two variables can be easily computed. This paper analyses the relationship between the private and public saving gaps in Malta during the 1970-1997 period and then proceeds to discern their respective impact on the current account position. In particular, it finds that the deterioration in the current account in the 1990�s was the result of higher government net borrowing, and that there was no statistically significant relationship between the private and public saving gap during the period. Given that in the coming decades economic restructuring and the ageing of the population will probably lead to higher investment and a drop in saving, the article concludes that public finances must be strengthened significantly if a further deterioration in the country�s external imbalance is to be prevented.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 33208.
Date of creation: Mar 2000
Date of revision:
current account sustainability; fiscal policies and the behaviour of economic agents; saving and investment trends;
Find related papers by JEL classification:
- H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
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.:
- Grech, Aaron George, 1999. "Funded pension schemes: Economic effects and policy implications," MPRA Paper 33615, University Library of Munich, Germany.
- Hamid Faruqee & Guy Debelle, 1996. "What Determines the Current Account? a Cross-Sectional and Panel Approach," IMF Working Papers 96/58, International Monetary Fund.
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