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Savings transition in Asia: Unity in diversity

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  • Prema-chandra Athukorala
  • Wanissa Suanin

Abstract

This paper examines the national savings behaviour in the process of economic growth through a comparative analysis of countries in developing Asia from a historical perspective. Developing Asia provides an ideal laboratory for the study with considerable differences in the savings behaviour among countries and over time within individual countries, notwithstanding the ‘model saver’ image based on the average savings rate. The empirical analysis distinguishes between private and government savings rates, with specific emphasis on the former. The results of the empirical analysis are consistent with the view of ‘virtuous circle’ between growth and savings, with growth initiating the savings transition. No evidence to suggest that a prior phase of promoting savings through specific policy initiatives is needed to initiate the process of growth and structural transformation. The private savings rate is associated positively with per capita gross domestic product, export orientation, and foreign resource inflows and negatively with the young dependency ratio of the population and domestic credit availability.

Suggested Citation

  • Prema-chandra Athukorala & Wanissa Suanin, 2023. "Savings transition in Asia: Unity in diversity," Departmental Working Papers 2023-01, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:2023-01
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    File URL: https://acde.crawford.anu.edu.au/sites/default/files/publication/acde_crawford_anu_edu_au/2024-06/acde_td_athukorala_suanin_2023_01.pdf
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    References listed on IDEAS

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    Cited by:

    1. Kunal Sen, . "The drivers of investment and savings rates: An exploratory note," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.

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    More about this item

    Keywords

    developing Asia; savings; investment; life cycle model; export-led growth;
    All these keywords.

    JEL classification:

    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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