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The Relationship Between Saving And Growth In South Africa: A Time Series Analysis

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  • AYLIT TINA ROMM

Abstract

This paper uses the Johansen VECM estimation technique to examine the directions of association between saving and growth in South Africa over the period 1946-1992. We examine the aggregate private saving rate and its interaction with investment and growth. The paper finds that the private saving rate has a direct, as well as, an indirect effect on growth. The indirect effect is through the private investment rate. In turn, we find that growth has a positive effect on the private saving rate. The extent of this effect is determined by liquidity constraints. Thus, we have a virtuous cycle, as growth enhances saving, which in turn further enhances growth. Copyright 2005 Economic Society of South Africa.

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  • Aylit Tina Romm, 2005. "The Relationship Between Saving And Growth In South Africa: A Time Series Analysis," South African Journal of Economics, Economic Society of South Africa, vol. 73(2), pages 171-189, June.
  • Handle: RePEc:bla:sajeco:v:73:y:2005:i:2:p:171-189
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    Cited by:

    1. repec:asi:ajemod:2018:p:98-109 is not listed on IDEAS
    2. BONGA-BONGA, Lumengo & GUMA, Nomvuyo, 2017. "The Relationship Between Savings And Economic Growth At The Disaggregated Level," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 70(1), pages 1-24.
    3. Fedderke, J.W. & Romm, A.T., 2006. "Growth impact and determinants of foreign direct investment into South Africa, 1956-2003," Economic Modelling, Elsevier, vol. 23(5), pages 738-760, September.
    4. repec:agr:journl:v:2(615):y:2018:i:2(615):p:247-254 is not listed on IDEAS

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