The evolution of savings in Brazil since 1960

: the role of real interest rates

Abstract

Is there any relationship between the real rate of savings (domestic and private) and the real interest rate in Brazil? In his work Daniel Gleizer assesses that - policies to strengthen national and private savings by increasing the real interest rate did not occur in Brazil because there was not any significant relation between these variables, in the period from 1960 to 1985. However, using one of his econometric models, a classical saving function, to examine the sensitivity of savings and changes in expected real interest rate in the period from 1960 to 2011, we conclude that there is a negative and significant relation between these variables, probably due to economic, political and social stability recently achieved. Economic stability provided the economic development that caused structural changes in the Brazilian society, in this way demographic characteristics were introduced as explanatory variables since they have direct effects on savings rates. The results after the introduction of those additional controls do not contradict the previous estimations - once again the real interest rate is a significant variable to explain variations in the real ratio of domestic and private savings.

Date of Award	13 Feb 2013
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	João César das Neves (Supervisor)