Munich Personal RePEc Archive

Saving and real interest rates in developing countries

Reinhart, Carmen and Ostry, Jonathan (1995): Saving and real interest rates in developing countries. Published in: Finance and Development , Vol. 32, No. 4 (December 1995): pp. 16-18.

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Abstract

Raising real interest rates has been cited as a way to increase private saving,and thus provide the resources for growth. But this may not be a viable approach in the poorest developing countries in which most people live at subsistence level. In these situations, consumption is not very responsive to fluctuations in real interest rates and financial liberalization my not be the catalyst to higher higher saving rates.

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