World Saving: Trends and Theories

Abstract

The world's average saving rate has declined for the last two decades but country saving rates exhibit a large dispersion, especially in developing regions. While in a small number of developing countries saving has risen substantially if -along with growth- saving has stagnated or even declined in most industrial, developing, and transition economies. This paper provides evidence on the evolution of world and regional saving rates and their correlation with selected variables. It also surveys conventional and more recent saving/consumption theories that are potentially relevant in explaining world saving patterns and correlations. Finally it identifies a selective number of research puzzles and policy issues that merit further research.