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Why is the Chinese Saving Rate so High?
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Guonan Ma & Wang Yi, World Economics, March 2011
China’s saving rate is high from many perspectives – historical experience, international standards and model predictions. Furthermore, the average saving rate has been rising over time, with much of the increase taking place in the 2000s. What sets China apart from the rest of the world is that its rising aggregate saving has reflected high savings rates in all three sectors: corporate, household and government. Our evidence casts doubt on the proposition that distortions and subsidies account for China’s high saving rate. Instead, we argue that tough corporate restructuring (including pension and home ownership reforms), a marked Lewismodel transformation process (where the average wage exceeds the marginal product of labour in the subsistence sector) and rapid ageing process have all played more important roles. Such structural factors suggest that the Chinese saving rate may peak over the coming years.
Greek Economic Statistics: A Decade of Deceit
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Brian Sturgess, World Economics, June 2010
This paper looks at the recent problems in official Greek economic data on public finances, whose reliability has been impaired by inappropriate accounting methods, the application of poor statistical methods and deliberate misreporting. Data on deficits and debt have been misleading from before Greece’s eurozone entry, but despite a regular supply of public information about the problems, the rating agencies did not respond by downgrading Greek public debt until it was too late. These agencies reacted to, rather than leading, market tends that were already under way. The issue casts doubt on the fitness for purpose of the European Statistical System where the powers of Eurostat, the statistics arm of the European Commission have been inadequate to effectively monitor the fiscal status of eurozone countries. These powers, at present limited by the principle of subsidiarity to administering a Code of Practice, must be strengthened closer to approximating a power of audit.

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