Saving in Mexico: The National and International Experience

Economía Mexicana, VIII (2): 181-230. 1999.

Posted: 5 Oct 2017

See all articles by A. Craig Burnside

A. Craig Burnside

Duke University - Department of Economics; University of Glasgow - Department of Economics; National Bureau of Economic Research (NBER)

Klaus Schmidt-Hebbel

Pontifical Catholic University of Chile

Luis Servén

World Bank - Development Research Group (DECRG)

Date Written: June 1, 1999

Abstract

How does Mexico’s saving performance compare to the world’s? Is Mexico different? And what drives Mexico’s saving behavior since the 1980s? This paper addresses these questions bringing together empirical evidence from Mexico with that from a large cross-country time-series data set on saving aggregates and their determinants. Using dynamic panel data estimation techniques, the paper characterizes the major factors behind world saving performance. In the light of this evidence, Mexico’s saving experience is compared to the international benchmark. Further, the paper turns to quarterly time-series evidence on saving in Mexico, and examines the factors behind the observed evolution of private and national saving using a regression framework, with particular attention to the issues of inflation adjustment and Ricardian equivalence. Key variables in Mexico’s saving performance have been the terms of trade, public saving, the real interest rate, and the inflation rate. Sustained future growth could be reinforced by a virtuous saving-growth cycle, nurtured by the strong response of private (and national) saving rates to income growth observed in the world sample.

Suggested Citation

Burnside, Craig and Schmidt-Hebbel, Klaus and Servén, Luis, Saving in Mexico: The National and International Experience (June 1, 1999). Economía Mexicana, VIII (2): 181-230. 1999., Available at SSRN: https://ssrn.com/abstract=3041998

Craig Burnside

Duke University - Department of Economics ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States

University of Glasgow - Department of Economics

Adam Smith Building
Glasgow, Scotland G12 8RT
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Klaus Schmidt-Hebbel (Contact Author)

Pontifical Catholic University of Chile ( email )

Av. Vicuna Mackenna 4860
Santiago
Chile

Luis Servén

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

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