Abstract
A major feature of the 1980s has been the large changes in current account balances in the world economy, reflecting changes in saving and investment balances in the major industrialized economies. The events of the 1980s raise a number of important questions: What are the implications of these current account developments and associated changes in government and private saving and investment behavior for world growth and the distribution of future consumption possibilities across countries?; What effects do changes in fiscal policies in different economies have on these outcomes?; How do the short run adjustments in the face of changes in policy assumptions compare to the long run outcomes under different assumptions about wage adjustment in the short run?
The author thanks a number of colleagues at Brookings for helpful discussions, especially Barry Bosworth, Ralph Bryant and Robert Lawrence. The views in this paper are those of the author and do not necessarily reflect the views any of the institutions with which the author is affiliated.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Similar content being viewed by others
Bibliography
Ando A., Mgdigu..Iani F.: «The Life Cycle Hypothesis of Saving: Aggregate Implications and Tests», American Economic Review, vol. 53, May 1963, pp. 55–84.
Baily M.N., Schultze C.: «The Productivity of Capital in a Period of Slower Growth», Brooking Papers on Economic Activity, 1990.
Bosworth B.: «International Differences in Saving», American Economic Review Papers and Proceedings, 1989.
Bosworth B.: «The Global Decline in Saving: Some International Comparisons*, Paper prepared for the conference on Saving, Economic Policy and Growth, Canberra ( Australia ), July 1990.
Campbell J, Mankiw N.G.: «Permanent Income, Current Income and Consumption», NBER, Working Paper, no. 2436, 1987.
Dean A., Durand M., Fallon J., Hoeller P.: «Saving Trends and Behavior in OECD Countries», OECD, Working Paper, no. 67, 1989.
Denison E.: Trends in American Economic Growth 1929–1982 Brookings Institutions, 1985.
Dornbusch R.: «Expectations and Exchange Rate Dynamics*, Journal of Political Economy no. 84, 1976, pp. 1161–76.
Fleming J.M.: «Domestic Financial Policies Under Fixed and Floating Exchange Rates», International Monetary Fund, Staff Papers vol. 9, no. 3, 1962, pp. 369–79.
Frenkel J., Razin A.: Fiscal Policies in the World Economy, London, MIT Press, 1988.
Hayashi F.: «Tobin’s Marginal q and Average q: A Neoclassical Interpretation», Econometrica no. 50, 1982, pp. 213–24.
Hayashi F.: «The Permanent Income Hypothesis: Estimation and Testing By Instrumental Variables», Journal of Political Economy vol. 90, no. 4, 1982, pp. 895–916.
Lipton D., Sachs J.: «Accumulation and Growth in a Two-Country Model», Journal of International Economics, no. 15, 1983, pp. 135–59.
Masson P., Tyron R.: «Macroeconomic Effects of Projected Population Aging in Industrial Economies», IMF, Working Paper, vol. 90, no. 5, 1990.
Mckibbin W.: «Can Macroeconomic Theory Explain the 1980s?», latest version: «The World Economy 1978 to 1988: Results from the MSG2 Model», Brookings Discussion Paper in International Economics no. 72, 1990.
Mckibbin W.: «Some Global Macroeconomic Implications of German Unification*, Brookings Discussion Paper in International Economics no. 81, 1990.
Mckibbin W.: On Fundamental Equilibrium Exchange Rates prepared for the Institute of International Economics Workshop on calculating Feer’s, 16 May 1990.
Mckibbin W.: «Saving and Growth with Multiple Agents», The Brookings Institution forthcoming 1990.
Mckibbin W., Sachs J.: «The McKibbin-Sachs Global Model», Brookings Discussion Paper in International Economics, no. 78, 1989.
Mckibbin W., Sachs J.: Macroeconomic Interdependence and Cooperation in the World Economy, draft, 1990.
Mundell R.: «Capital Mobility and Stabilization Policy Under Fixed and Flexible Exchange Rates», Canadian Journal of Economic and Political Sciences vol. 29, no. 4, 1963, pp. 475–85.
Phelps E., Frroussi J.P.: «Causes of the 1980s Slump in Europe», Brookings Paper on Economic Activity, no. 2, 1986, pp. 487–520.
Solow R.: Growth Theory: An Exposition, Oxford, Oxford University Press, 1970.
Swan T.: «Economic Growth and Capital Accumulation», Economic Record 1956.
Taylor J.: «Aggregate Dynamics and Staggered Contracts*, Journal of Political Economy no. 88, 1980, pp. 1–23.
Tosin J.: «Life Cycle Saving and Balanced Growth», in FELLNER et AL.: Ten Economic studies on the Tradition of Irving Fisher, London, John Wiley and Sons, 1967.
Tosin J.: «A General Equilibrium Approach to Monetary Theory», Journal of Money Credit and Banking 1969.
Whalley: Trade Liberalization Among the Major World Trading Areas, London, MIT Press, 1985.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Copyright information
© 1993 Servizio Italiano Pubblicazioni Internazionali
About this chapter
Cite this chapter
McKibbin, W.J. (1993). Savings and Growth in an Interdependent World. In: Baldassarri, M., Paganetto, L., Phelps, E.S. (eds) World Saving, Prosperity and Growth. Central Issues in Contemporary Economic Theory and Policy. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-22925-3_10
Download citation
DOI: https://doi.org/10.1007/978-1-349-22925-3_10
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-22927-7
Online ISBN: 978-1-349-22925-3
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)