The Stock Market, Capital Formation and Economic Growth: A Critical Commentary on the World Bank?S Proposals

Posted: 5 Jun 1998

See all articles by Ajit Singh

Ajit Singh

United Nations; University of Cambridge

Abstract

Proposing far-reaching reforms to the pension systems, the World Bank has recently suggested that the existing pay-as-you-go pension systems in many rich as well as poor countries, should be replaced by fully funded, mandatory, preferably private pensions as the main pillars of the new system. It argues that these reforms will not only benefit the pensioners, but also enhance savings, promote capital formation and economic development. This paper provides a critical examination of the Bank?s theses and concludes that it has adopted a one-sided view of the relationships between the key critical variables. The proposed reform may therefore neither protect the old nor achieve faster economic growth.

JEL Classification: E6, H5

Suggested Citation

Singh, Ajit, The Stock Market, Capital Formation and Economic Growth: A Critical Commentary on the World Bank?S Proposals. Available at SSRN: https://ssrn.com/abstract=95888

Ajit Singh (Contact Author)

United Nations ( email )

New York, NY 10017
United States

University of Cambridge ( email )

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Sidgwick Avenue
Cambridge, CB3 9DD
United Kingdom
+ 44 1223 350434 (Phone)
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