Private Saving in Colombia

By Juan Ricardo Ortega, Alejandro Lopez Mejia

December 1, 1998

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Juan Ricardo Ortega, and Alejandro Lopez Mejia. Private Saving in Colombia, (USA: International Monetary Fund, 1998) accessed November 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper studies the main determinants of the sharp decline in Colombia’s private saving rate which accompanied the steep deterioration of the country’s external current account deficit in the 1990s. The paper rejects current arguments pointing to a consumption boom and corporate behavior as the main causes of the decline. It concludes that: private consumption, explained mainly by permanent income, has only increased moderately in the 1990s; household behavior—not corporate behavior—determines private saving; and tax increases do not entirely explain the fall of private saving. Thus, reliance on external saving could be reduced by increasing public saving.

Subject: Consumption, Income, National accounts, Personal income, Private consumption, Private savings

Keywords: Consumption, Consumption behavior, Consumption boom, Corporate Veil, Income, Liquidity constraint, Nondurable consumption in Colombia, Personal income, Private consumption, Private saving, Private savings, Ricardian Equivalence, Saving rate, Utility function, WP

Publication Details

Pages:

34
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1998/171
Stock No:

WPIEA1711998
ISBN:

9781451858471
ISSN:

1018-5941

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