Saving and Growth: Granger Causality Analysis with Bootstrapping on Panels of Countries

Abstract

This paper investigates the possibility of Granger causality between the saving ratio (the proportion of gross domestic saving in GDP) and the growth rate (annual percentage change of real per capita GDP) in eighty-four countries of the world from 1961 to 2000. For technical reason, on the basis of their per capita GDP in 1995, the countries have been classified as high-income (at least 10000 $US), medium-income (between 1000 and 10000 $US) and lowincome (less than 1000 $US) countries, and the three panels of twenty-six, thirty and twentyeight countries, respectively, are considered separately. Granger causality is tested for with a new panel-data approach based on SUR systems a..