18 _ data samples used here, close comparison between these results and those obtained with the private saving rate reveals a remarkable similarity in terms of sign and significance of the estimated coefficients. Indeed, our preferred (GMM-system) estimates are basically the same for the private and national saving rates, with three differences of some relevance. First, the real interest rate still carries a negative coefficient, but it is not significant in the national saving rate regressions; second, the effect of the level of income is much larger in the case of the national saving rate; and third, the degree of persistence is lower for national than for private saving rates. In turn, the results obtained using alternative estimators are also quite similar for both dependent variables. We take this broad similarity, along with the fact that the theoretical literature provides a framework for the analysis of private saving decisions, as supportive of our choice to concentrate on the empirical determinants of the private saving rate.

.

# 5. Concluding Remarks

Private and national saving rates display very large variation across countries and over time. This paper has explored empirically the roles of policy variables and other factors in these large saving disparities. The paper extends the literature in several dimensions. First, it makes use of a new data set on saving and related macroeconomic variables, whose coverage in terms of countries and years is considerably broader than those used in previous literature. Second, it explores different dimensions of saving -- of the private sector and the nation. Third, it tries to correct for issues such as simultaneity and unobserved country-specific effects, making use of instrumental variable estimators based on “internal” instruments. Fourth, it performs extensive robustness checks to changes in estimation procedures, country samples, private-saving measures, and empirical specifications.

, The main empirical findings reported in the paper are the following:

- e Private saving rates show inertia, that is, they are highly serially correlated even after controlling for other relevant factors. The effects of a change in a given saving determinant are thus fully realized only after a number of years, with long run responses estimated to be more than two times larger than short-run (within a year) ones.

- e Private saving rates rise with the level and growth rate of real per capita incomie. The influence of income is larger in developing than in developed countries. In developing countries a doubling of income per capita is estimated, other things equal, to raise the long-run private saving rate by some 10 percentage points of disposable income. Likewise, a 1 percentage-point rise in the growth rate raises the _ private saving rate by a similar amount. The overall implication is that policies that spur development are an indirect but effective way to raise private saving rates.

;

- e The predictions of the life-cycle hypothesis are supported in that dependency ratios have a negative effect on private saving rates. The negative impact of an increase in the old-dependency ratio is more than twice as large as that of the youngdependency ratio.