Understanding%20Domestic%20Saving%20in%20Latin%0D%0AAmerica%20and%20the%20Caribbean%3A%0D%0AThe%20Case%20of%20Mexico%0D%0A

Working Papers

Understanding Domestic Saving in Latin America and the Caribbean: The Case of Mexico


CODE: IDB-WP-606
AUTHOR(s): Karver, Jonathan , Mendoza, Pamela , Székely, Miguel
PUBLISHED: September 2015
LANGUAGE: English
RELATED TOPICS: Macroeconomics
DOWNLOAD FILE IN: English

Abstract:

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 Research by JEL Codes:
(or click here to find research by JEL Codes)
  • Saving for Development: How Latin America and the Caribbean Can Save More and Better (Executive Summary)
    Brochures
    IDB-BR-183 - June 2016

    Why should people—and economies—save? The typical answer usually focuses on the need to protect against future shocks, to smooth consumption during hard times, in short, to save for the proverbial rainy day. This book approaches the question from a slightly different angle. While saving to survive the bad times is important, saving to thrive in the good times is what really counts. This book explo ... (View publication)

  • Saving for Development: How Latin America and the Caribbean Can Save More and Better
    Books
    IDB-BK-159 - June 2016

    Why should people—and economies—save? The typical answer usually focuses on the need to protect against future shocks, to smooth consumption during hard times, in short, to save for the proverbial rainy day. This book approaches the question from a slightly different angle. While saving to survive the bad times is important, saving to thrive in the good times is what really counts. This book explo ... (View publication)

  • Non-Contributory Pensions and Savings: Evidence from Argentina
    Working Papers
    IDB-WP-629 - April 2016

    This paper examines the effects of Argentina’s Plan de Inclusión Previsional (PIP), which changed the pension system in a way that generated a new noncontributory pillar, produced a huge expansion in pension coverage between 2005 and 2008 and a transfer of a vast amount of resources to households. Using a difference in differences methodology it is found that the PIP policy has reduced the in ... (View publication)

Hello, Welcome to the IDB!

Please join our mailing list by simply entering your email below.