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Savings and Income Distribution

  • Hongyi Li

    (BA Faculty, Chinese University of Hong Kong)

  • Heng-fu Zou

    (The World Bank
    Guanghua School of Management, Peking University
    Institute for Advanced Study, Wuhan University)

While this paper emphasizes the analytical ambiguity of the relationship between savings and income inequality, the empirical examination renders weak support for a negative association between them. However, this relationship is not very robust. Subsamples of OECD countries and Asian countries show that income inequality and the savings rate can be positively and significantly associated.

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Paper provided by China Economics and Management Academy, Central University of Finance and Economics in its series CEMA Working Papers with number 487.

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Length: 26 pages
Date of creation: 2011
Date of revision:
Publication status: Published in Annals of Economics and Finance, Society for AEF, vol. 5(2), pages 245-270, November.
Handle: RePEc:cuf:wpaper:487
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  1. Alesina, Alberto F & Rodrik, Dani, 1991. "Distributive Politics and Economic Growth," CEPR Discussion Papers 565, C.E.P.R. Discussion Papers.
  2. Hongyi Li & Danyang Xie & Heng-fu Zou, 2002. "Dynamics of Income Distribution," GE, Growth, Math methods 0210001, EconWPA.
  3. Roberto Perotti, 1993. "Political Equilibrium, Income Distribution, and Growth," Review of Economic Studies, Oxford University Press, vol. 60(4), pages 755-776.
  4. Maddison, Angus, 1992. " A Long-Run Perspective on Saving," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(2), pages 181-96.
  5. Hongyi Li & Lyn Squire & Heng-fu Zou, 1998. "Explaining International and Intertemporal Variations in Income Inequality," CEMA Working Papers 73, China Economics and Management Academy, Central University of Finance and Economics.
  6. KESSLER, Denis & PERELMAN, Sergio & PESTIEAU, Pierre, . "Savings behavior in 17 OECD countries," CORE Discussion Papers RP 1045, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Michael Sattinger (ed.), 2001. "Income Distribution," Books, Edward Elgar Publishing, volume 0, number 2018, 10.
  8. Christopher D. Carroll & Byung-Kun Rhee & Changyong Rhee, 1994. "Are There Cultural Effects on Saving? Some Cross-Sectional Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 109(3), pages 685-699.
  9. Persson, T. & Tabellini, G., 1993. "Is Inequality Harmful for Growth," Papers 537, Stockholm - International Economic Studies.
  10. Della Valle, Philip A & Oguchi, Noriyoshi, 1976. "Distribution, the Aggregate Consumption Function, and the Level of Economic Development: Some Cross-Country Results," Journal of Political Economy, University of Chicago Press, vol. 84(6), pages 1325-34, December.
  11. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 465-490.
  12. Shafer, Jeffrey R & Elmeskov, Jorgen & Tease, Warren, 1992. " Saving Trends and Measurement Issues," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(2), pages 155-75.
  13. Musgrave, Philip, 1980. "Income Distribution and the Aggregate Consumption Function," Journal of Political Economy, University of Chicago Press, vol. 88(3), pages 504-25, June.
  14. Sebastian Edwards, 1995. "Why are Saving Rates so Different Across Countries?: An International Comparative Analysis," NBER Working Papers 5097, National Bureau of Economic Research, Inc.
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