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Corresponding Author:
Lumengo Bonga-Bonga, Department of Economics and Econometrics, University of Johannesburg, South Africa

Coauthors:
Nomvuyo GUMA, University of Johannesburg, South Africa

The Relationship between Savings and Economic Growth at the Disaggregated Level

Volume 70 - Issue 1, February 2017
(pp. 1-24)
JEL classification: C1, E2, O4
Keywords: Savings, Corporates, Households, Government, Cointegration

Abstract

While the literature, both international and in South Africa, is relatively rich in studies on the determinants of foreign direct investment as well as the determinants of savings, none of the work done on South Africa has made use of disaggregated saving data to understand whether there is an observable difference in the marginal propensity to save of the different economic sectors. Thus, this paper attempts to assess the marginal propensity to save by the household, corporate and government sectors in South Africa. The results of the econometric analysis demonstrate that the greatest responsiveness of savings to GDP growth occurs amongst corporates. These findings should inform the South African government on how to regulate sectoral taxation that intends to encourage savings, given the low level of savings in the country.

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