Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/109351 
Year of Publication: 
2009
Series/Report no.: 
ADB Economics Working Paper Series No. 158
Publisher: 
Asian Development Bank (ADB), Manila
Abstract: 
An integral part of global current account imbalances is the large and persistent current account surplus developing Asia has run since the 1997–1998 Asian crisis. A country's current account surplus is, by definition, equal to its net saving. The central objective of this paper is to investigate the extent to which the saving and investment rate of Asian countries can be explained by the underlying fundamental determinants of saving and investment such as gross domestic product growth and demographic factors. Our empirical analysis yields two key findings. First, we find stronger evidence of oversaving than underinvestment in the region. Second, we find stronger evidence of overinvestment prior to the Asian crisis than underinvestment after the Asian crisis. This suggests that the key to rebalancing Asian growth toward domestic sources lies in promoting consumption rather than investment.
Subjects: 
Saving
investment
current account balance
global imbalance
Asia
JEL: 
E21
E22
F32
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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