IDEAS home Printed from https://ideas.repec.org/p/wii/wpaper/45.html
   My bibliography  Save this paper

Do Increased Private Saving Rates Spur Economic Growth?

Author

Listed:
  • Kazimierz Laski

    () (The Vienna Institute for International Economic Studies, wiiw)

Abstract

Growth of aggregate demand at any given private saving rate depends on growth of private investment, export surplus and budget deficit. Slower growth of private investment in the mid-1970s has triggered stagnation trends in Europe's developed economies, caused mainly by inadequate aggregate demand. The relation between aggregate demand and the propensity to save is analysed in the present paper using the model of 'stunted growth' of Josef Steindl. The decreased utilization of capacity characteristic of stagnation can be counteracted by a reduction of the propensity to save. The most important factors determining the saving rate are distribution of incomes and the progressivity of the tax system. In many countries and periods, an inverse relation between the growth of GDP and of the private saving rate has been found and presented in the study.

Suggested Citation

  • Kazimierz Laski, 2007. "Do Increased Private Saving Rates Spur Economic Growth?," wiiw Working Papers 45, The Vienna Institute for International Economic Studies, wiiw.
  • Handle: RePEc:wii:wpaper:45
    as

    Download full text from publisher

    File URL: https://wiiw.ac.at/do-increased-private-saving-rates-spur-economic-growth--dlp-545.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Bhaduri, Amit, 1972. "Unwanted Amortisation Funds," Economic Journal, Royal Economic Society, vol. 82(326), pages 674-677, June.
    2. Michael P. Devereux & Rachel Griffith & Alexander Klemm, 2002. "Corporate income tax reforms and international tax competition," Economic Policy, CEPR;CES;MSH, vol. 17(35), pages 449-495, October.
    3. Amit Bhaduri & Kazimierz Laski & Martin Riese, 2006. "A Model Of Interaction Between The Virtual And The Real Economy," Metroeconomica, Wiley Blackwell, vol. 57(3), pages 412-427, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    aggregate demand; aggregate supply; 'stunted growth' model; private saving rate; GDP growth;

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wii:wpaper:45. 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: (Customer service). General contact details of provider: http://edirc.repec.org/data/wiiwwat.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.