Saving in Latin America and the Caribbean: Performance and Policies

42 Pages Posted: 8 Jun 2015

See all articles by Francesco Grigoli

Francesco Grigoli

International Monetary Fund (IMF)

Alexander Herman

International Monetary Fund (IMF)

Klaus Schmidt-Hebbel

Pontifical Catholic University of Chile

Date Written: May 2015

Abstract

This paper analyzes saving patterns and determinants in Latin America and the Caribbean (LAC), including key policy variables and regimes. The review of previous empirical studies on LAC saving reveals contradictions and omissions. This paper presents empirical results of an extensive search of determinants of private and public saving rates, adding previously neglected variables (including different measures of key external prices and macroeconomic policy regimes), in linear form and in interactions with other saving determinants. It analyzes statistical differences in saving determinants between LAC and the rest of the world in a nested econometric framework, and discusses differences across three country subgroups within LAC. The results highlight commonalities and differences in saving behavior between LAC and other world regions, as well as within LAC, identifying the role of key policy variables and regimes.

Keywords: Savings, Latin America, Caribbean, Private savings, Public sector savings, Terms of trade, Fiscal policy, Monetary policy, consumption, public saving, income, tax, price, commodity, tax rate

JEL Classification: C23, E21, H30

Suggested Citation

Grigoli, Francesco and Herman, Alexander and Schmidt-Hebbel, Klaus, Saving in Latin America and the Caribbean: Performance and Policies (May 2015). IMF Working Paper No. 15/108. Available at SSRN: https://ssrn.com/abstract=2615300

Francesco Grigoli (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Alexander Herman

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Klaus Schmidt-Hebbel

Pontifical Catholic University of Chile ( email )

Av. Vicuna Mackenna 4860
Santiago
Chile

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