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Macroeconomics


The Mystery of Saving in Latin America
Cavallo, Eduardo A.; Noy, Ilan; Becerra, Oscar
Working Papers - English - Nov, 2015

Using reduced-form regression models, this paper shows that average predicted private saving rates in Latin America and the Caribbean (LAC) are significantly lower than in other regions, particularly Emerging Asia (about 4 percentage points of GDP on average). Predicted public saving rates in LAC are also lower than in Emerging Asia, but by a smaller margin (1 percentage point of GDP on average). It is further shown that LAC private saving rates are below the region-specific prediction by approximately 1.5 percentage points of GDP on average. Finally, it is found that a greater reliance on external savings does not fully close the negative estimated private saving gap, reducing it by less than 1 percentage point. No gap is found in the case of public saving rates, suggesting that the lower predicted public saving rate in LAC is accounted for by the known determinants of fiscal policy.

Related JEL Codes:
E21 - Consumption; Saving; Wealth


Revelation of Expectations in Latin America(REVELA) - Issue 55
Powell, Andrew; Sosa, Mariano
Newsletter / Journal - English - Nov, 2015

The August 2015 surveys of expectations conducted by Central Banks with inflation targeting regimes indicate that the simple average growth expectations for 2015 for the eight countries covered by REVELA have decreased by 0.1% from 2.5% to 2.4%. Moreover, the GDP weighted average growth expectations have fallen by 0.2%, from 0.5% to 0.3%. Meanwhile, surveys indicate that inflation expectations for 2015 have increased by 0.2% from 4.9% to 5.1% considering the simple average, and by 0.1% from 6.3% to 6.4% on a GDP weighted average basis. At the individual country level, growth expectations for 2015 have fallen in Brazil (by 0.3%), Mexico (by 0.3%), Peru (by 0.2%), Chile (by 0.1%) and Uruguay (by 0.1%); while they have remained constant in Paraguay (at 4.0%) and Colombia (at 3.5%), and have increased in Guatemala (by 0.1%). Inflation expectations for 2015 have increased in Uruguay (by 0.5%), Chile (by 0.4%), Colombia (by 0.3%), Peru (by 0.2%) and Brazil (by 0.1%). They have remained stable in Paraguay (at 4.5%) and Mexico (at 2.8%) and have decreased in Guatemala (by 0.1%).Expected growth for 2015 now ranges between -2.0% in Brazil and 4.0% in Paraguay, while expected inflation ranges between 2.8% in Mexico and 9.3% in Brazil.


Understanding Domestic Savings in Chile
García, Gonzalo; Llodrá, Jose Ignacio; Cerda, Rodrigo; Fuentes, Rodrigo
Working Papers - English - Oct, 2015

This paper constructs time series data on savings per type of agent for Chile during the period 1960-2012. It is found that the economy’s average savings rate increased by 11 percentage points in the period 1985-2012 compared to 1960- 1984, with particularly pronounced growth in corporate savings. The evidence suggests that this increase was driven largely by the following measures: i) pension reform that introduced mandatory savings and private sector management, ii) banking reform, iii) tax reform, iv) capital markets reform and v) privatizations.

Related JEL Codes:
E21 - Consumption; Saving; Wealth
N16 - Macroeconomics and Monetary Economics; Growth and Fluctuations: Latin America; Caribbean


Revelation of Expectations in Latin America(REVELA) - Issue 54
Powell, Andrew; Sosa, Mariano
Newsletter / Journal - English - Sep, 2015

The July 2015 surveys of expectations conducted by Central Banks with inflation targeting regimes indicate that the simple average growth expectations for 2015 for the eight countries covered by REVELA have decreased by 0.2% from 2.7% to 2.5%. Moreover, the GDP weighted average growth expectations have fallen by 0.2%, from 0.7% to 0.5%. Regarding inflation expectations, surveys indicate that inflation expected for the region in 2015 has remained stable at 4.9% on the simple average basis, and has increased by 0.2% from 6.1% to 6.3% on the weighted average basis. Comparing the June and July surveys, expected 2015 growth has decreased in Paraguay (by 0.5%), Peru (by 0.4%), Brazil (by 0.3%), Colombia (by 0.2%), Guatemala (by 0.1%) and Uruguay (by 0.1%), while it has remained stable in Mexico at 2.6% and in Chile at 2.3%. Inflation expectations have risen in Brazil (by 0.3%), Uruguay (by 0.3%) and Peru (by 0.1%). They have remained constant in Paraguay (at 4.5%), Colombia (at 3.9%) and Chile (at 3.8%), and have decreased in Guatemala (by 0.3%) and Mexico (by 0.1%).Expected growth now ranges between 4.0% (Paraguay) and -1.7% (Brazil), while expected inflation for 2015 ranges between 9.2% (Brazil) and 2.8% (Mexico).


Understanding Domestic Saving in Latin America and the Caribbean: The Case of Mexico
Karver, Jonathan; Székely, Miguel; Mendoza, Pamela
Working Papers - English - Sep, 2015

This study addresses why Mexico continues to show below-average economic growth rates in spite of displaying systematically higher domestic savings than other countries in the region. Using the wealth of relevant databases available for the country, the paper finds that a possible explanation is that household savings account for a majority of domestic savings, and that the main instrument used for savings is durable goods, which implies that savings are not directly injected into the financial system for fueling productive investment. The construction of a synthetic panel from household survey data shows that household savings in Mexico have a clear age-increasing trend and have been growing across generations during the past 30 years; it is thus probable that rates will increase in years to come. However, if those savings continue to elude the financial system, their influence on economic growth may remain limited.

Related JEL Codes:
D14 - Personal Finance
E22 - Capital; Investment; Capacity


Results: 41 - 45 of 889

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