What Explains Private Saving in Mexico?
This paper examines the factors influencing Mexico's private saving rate. Cross-country analysis finds that Mexico's private saving is somewhat higher than could be explained by its fundamentals, but lower than in the average country in the sample. This analysis suggests that Mexico's greater reliance on external saving, its relatively high population dependency ratio, and its less developed financial system have been the main factors holding back private saving. Time-series analysis finds that movements in private saving have not been associated with similar shifts in investment, as changes in public saving and external saving have tended to offset movements in private saving. This is consistent with the direction of causality being from investment to saving and suggests that policy measures should focus on creating conditions favorable to increased investment.
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- Marco A. Espinosa-Vega & Tapen Sinha, 2000. "A primer and assessment of social security reform in Mexico," Economic Review, Federal Reserve Bank of Atlanta, issue Q1, pages 1-23.
- A. Javier Hamann, 1993. "Private Saving, Public Saving, and the Inflation Tax; Another Look At An Old Issue," IMF Working Papers 93/37, International Monetary Fund.
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