Explaining the Increase in Saving in Chile

Abstract

The paper attempts to explain the sharp increase in the Chilean domestic saving rate. It addresses the issue from different angles. It estimates the series for the period 1960-1994 for domestic saving and its main components (public and private saving and within the latter, household and business saving). With these data, a series of econometric analyses is done within the framework of an error correction model. The paper explores the extent to which households adjust their saving to take into account the saving behavior of business saving. It also undertakes a study of corporate saving using panel data for firms listed on the Chilean stock exchange for the period 1986-1994.

JEL Classification: E21, E22, O11