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The Relationship Between Savings And Economic Growth At The Disaggregated Level

Author

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  • BONGA-BONGA, Lumengo

    () (University of Johannesburg)

  • GUMA, Nomvuyo

    (University of Johannesburg)

Abstract

While the literature, both international and in South Africa, is relatively rich in studies on the determinants of foreign direct investment as well as the determinants of savings, none of the work done on South Africa has made use of disaggregated saving data to understand whether there is an observable difference in the marginal propensity to save of the different economic sectors. Thus, this paper attempts to assess the marginal propensity to save by the household, corporate and government sectors in South Africa. The results of the econometric analysis demonstrate that the greatest responsiveness of savings to GDP growth occurs amongst corporates. These findings should inform the South African government on how to regulate sectoral taxation that intends to encourage savings, given the low level of savings in the country. Il rapporto tra risparmio e crescita economica a livello disaggregato Sia la letteratura internazionale che quella relativa al Sud Africa sono relativamente ricche di studi sulle determinanti degli investimenti diretti esteri e del risparmio, ma nessuno degli studi sul Sud Africa ha utilizzato dati disaggregati sul risparmio per comprendere se c’è una differenza rilevante nella propensione marginale al risparmio dei diversi settori economici. Scopo di questo lavoro è valutare la propensione marginale al risparmio del settore privato, del settore corporate e del settore pubblico in Sud Africa. I risultati dell’analisi econometrica mostrano che la maggiore reattività del risparmio alla crescita del PIL si ha nel settore corporate. Queste evidenze dovrebbero suggerire al governo sudafricano come regolare la tassazione nei vari settori al fine di incentivare il risparmio, considerato il suo basso livello nel paese.

Suggested Citation

  • 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.
  • Handle: RePEc:ris:ecoint:0792
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    References listed on IDEAS

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    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Charles Yuji Horioka & Junmin Wan, 2007. "The Determinants of Household Saving in China: A Dynamic Panel Analysis of Provincial Data," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(8), pages 2077-2096, December.
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    6. Janine Aron & John Muellbauer, 2000. "Personal and Corporate Saving in South Africa," World Bank Economic Review, World Bank Group, vol. 14(3), pages 509-544, September.
    7. Schwert, G William, 2002. "Tests for Unit Roots: A Monte Carlo Investigation," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 5-17, January.
    8. Emmanuel Anoruo & Yusuf Ahmad, 2001. "Causal Relationship between Domestic Savings and Economic Growth: Evidence from Seven African Countries," African Development Review, African Development Bank, vol. 13(2), pages 238-249.
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    12. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 39(3), pages 106-135.
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    14. Lumengo Bonga-Bonga, 2008. "National Saving and Fiscal Policy in South Africa: an Empirical Analysis Sector in South Africa," Working Papers 84, Economic Research Southern Africa.
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    Cited by:

    1. Andrew Phiri, 2017. "The Feldstein-Horioka puzzle and the global financial crisis: Evidence from South Africa using asymmetric cointegation analysis," Working Papers 1701, Department of Economics, Nelson Mandela University, revised May 2017.
    2. Lumengo Bonga-bonga & Maphelane Phume, 2018. "Assessing the relationship between total factor productivity and foreign direct investment in an economy with a skills shortage: the case of South Africa," Economics Bulletin, AccessEcon, vol. 38(3), pages 1395-1405.
    3. Phiri, Andrew, 2017. "The Feldstein-Horioka puzzle and the global recession period: Evidence from South Africa using asymmetric cointegration analysis," MPRA Paper 79096, University Library of Munich, Germany.

    More about this item

    Keywords

    Savings; Corporates; Households; Government; Cointegration;

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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