Personal and Corporate Saving in South Africa
Low domestic saving rates in South Africa may perpetuate a low-growth trap. The decline in government saving, a major reason for the overall decline in saving, is now being reversed. However, personal saving rates have fallen since 1993, and corporate rates since 1995, and both may decline further with lower real interest rates. It is important to understand both personal and corporate saving behavior in order to formulate policies to raise the domestic saving rate in line with the needs of economic growth. This article summarizes previous work on the household sector, emphasizing the role of financial liberalization, assets, and income expectations, and explains sectoral links and policy implications. Further, it analyzes South Africa's corporate saving rate in detail. Models are developed both for the share of profits in national income, including the roles of the terms of trade, tax effects, and the price to unit labor cost ratio, and for the share of corporate saving in profits, which is found to depend on inflation, the real interest rate, dividend taxation, and financial liberalization. Corporate saving is remarkably under-researched, given its importance in many economies. This research thus puts the saving and growth concerns of Kaldor into a modern empirical context. Copyright The Author 2000. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / the world bank . All rights reserved. For permissions, please e-mail: firstname.lastname@example.org, Oxford University Press.
Volume (Year): 14 (2000)
Issue (Month): 3 (September)
|Contact details of provider:|| Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK|
Phone: (202) 477-1234
Fax: 01865 267 985
Web page: http://wber.oxfordjournals.org/
More information through EDIRC
|Order Information:||Web: http://www.oup.co.uk/journals|
References listed on IDEAS
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.:
- Lucio Sarno & Mark P. Taylor, .
"Real Interest Rates, Liquidity Constraints and Financial Deregulation: Private Consumption Behaviour in the UK,"
Economics and Finance Discussion Papers
97-12, Economics and Finance Section, School of Social Sciences, Brunel University.
- Sarno, Lucio & Taylor, Mark P., 1998. "Real Interest Rates, Liquidity Constraints and Financial Deregulation: Private Consumption Behavior in the U.K," Journal of Macroeconomics, Elsevier, vol. 20(2), pages 221-242, April.
- Engle, Robert & Granger, Clive, 2015.
"Co-integration and error correction: Representation, estimation, and testing,"
Publishing House "SINERGIA PRESS", vol. 39(3), pages 106-135.
- Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
- Steve Bond & Lucy Chennells & Michael Devereux, 1995. "Company dividends and taxes in the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 16(3), pages 1-18, August.
- Tullio Jappelli & Marco Pagano, 1994.
"Saving, Growth, and Liquidity Constraints,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 109(1), pages 83-109.
- Oriana Bandiera & Gerard Caprio & Patrick Honohan & Fabio Schiantarelli, 2000.
"Does Financial Reform Raise or Reduce Saving?,"
The Review of Economics and Statistics,
MIT Press, vol. 82(2), pages 239-263, May.
- James G. MacKinnon, 2010.
"Critical Values for Cointegration Tests,"
1227, Queen's University, Department of Economics.
- R. Glenn Hubbard & Jonathan S. Skinner, 1996.
"Assessing the Effectiveness of Saving Incentives,"
Journal of Economic Perspectives,
American Economic Association, vol. 10(4), pages 73-90, Fall.
- repec:fth:harver:1435 is not listed on IDEAS
- John Muellbauer & Janine Aron, 1999.
"Estimates of personal sector wealth for South Africa,"
CSAE Working Paper Series
1999-17, Centre for the Study of African Economies, University of Oxford.
- John Muellbauer & Janine Aron, 1999. "Estimates of personal sector wealth for South Africa," Economics Series Working Papers WPS/1999-17, University of Oxford, Department of Economics.
- Aron, Janine & Muellbauer, John, 2004. "Estimates of Personal Sector Wealth for South Africa," CEPR Discussion Papers 4646, C.E.P.R. Discussion Papers.
- Janine Aron & John Muellbauer, 2000.
"Financial liberalisation, consumption and debt in South Africa,"
CSAE Working Paper Series
2000-22, Centre for the Study of African Economies, University of Oxford.
- Janine Aron & John Muellbauer, 2000. "Financial Liberalization, Consumption and Debt in South Africa," Economics Series Working Papers WPS/2000-22, University of Oxford, Department of Economics.
- John Y. Campbell & N. Gregory Mankiw, 1989.
"Consumption, Income, and Interest Rates: Reinterpreting the Time Series Evidence,"
NBER Working Papers
2924, National Bureau of Economic Research, Inc.
- John Y. Campbell & N. Gregory Mankiw, 1989. "Consumption, Income and Interest Rates: Reinterpreting the Time Series Evidence," NBER Chapters, in: NBER Macroeconomics Annual 1989, Volume 4, pages 185-246 National Bureau of Economic Research, Inc.
- repec:fth:oxesaf:99-17 is not listed on IDEAS
- Campbell, John Y. & Mankiw, N. Gregory, 1991. "The response of consumption to income : A cross-country investigation," European Economic Review, Elsevier, vol. 35(4), pages 723-756, May.
- Banerjee, Anindya & Dolado, Juan J. & Galbraith, John W. & Hendry, David, 1993. "Co-integration, Error Correction, and the Econometric Analysis of Non-Stationary Data," OUP Catalogue, Oxford University Press, number 9780198288107, December.
- Geeta Kingdon & John Knight, 2000.
"Are Searching and Non-searching Unemployment Distinct States when Unemployment is High? The Case of South Africa,"
Economics Series Working Papers
WPS/2000-02, University of Oxford, Department of Economics.
- Geeta G. Kingdon & John B. Knight, 2000. "Are searching and non-searching unemployment distinct states when unemployment is high? The case of South Africa," CSAE Working Paper Series 2000-02, Centre for the Study of African Economies, University of Oxford.
- Bayoumi, Tamim A, 1993. "Financial Deregulation and Consumption in the United Kingdom," The Review of Economics and Statistics, MIT Press, vol. 75(3), pages 536-39, August.
- Davidson, James E H, et al, 1978. "Econometric Modelling of the Aggregate Time-Series Relationship between Consumers' Expenditure and Income in the United Kingdom," Economic Journal, Royal Economic Society, vol. 88(352), pages 661-92, December.
- Schmidt-Hebbel, K. & Serven, L., 1997. "Saving Across the World: Puzzles and Policies," World Bank - Discussion Papers 354, World Bank.
- Roger H. Gordon & Joel Slemrod, 1998. "Are "Real" Responses to Taxes Simply Income Shifting Between Corporate and Personal Tax Bases?," NBER Working Papers 6576, National Bureau of Economic Research, Inc.
- M. S. Feldstein, 1970. "Corporate Taxation and Dividend Behaviour," Review of Economic Studies, Oxford University Press, vol. 37(1), pages 57-72.
- James M. Poterba, 1987.
"Tax Policy and Corporate Saving,"
470, Massachusetts Institute of Technology (MIT), Department of Economics.
- Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
- Robert E. Hall & Frederic S. Mishkin, 1980.
"The Sensitivity of Consumption to Transitory Income: Estimates from Panel Data on Households,"
NBER Working Papers
0505, National Bureau of Economic Research, Inc.
- Hall, Robert E & Mishkin, Frederic S, 1982. "The Sensitivity of Consumption to Transitory Income: Estimates from Panel Data on Households," Econometrica, Econometric Society, vol. 50(2), pages 461-81, March.
- R. Glenn Hubbard & Jonathan S. Skinner, 1996. "Assessing the Effectiveness of Saving Incentives," Books, American Enterprise Institute, number 53540, February.
- David, Paul A & Scadding, John L, 1974. "Private Savings: Ultrarationality, Aggregation, and "Denison's Law."," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 225-49, Part I, M.
- Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-87, December.
When requesting a correction, please mention this item's handle: RePEc:oup:wbecrv:v:14:y:2000:i:3:p:509-544. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press)or (Christopher F. Baum)
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.