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This paper empirically tests the impact of capital sudden stops on the economic growth using quarterly data from 49 emerging economies.

This paper applies the GMM dynamic panel estimation method.

The results show that capital sudden stops can significantly inhibit the economic growth of emerging economies. It was also found that the inhibiting effect on low-savings-rate economies is greater, but less on high-savings-rate economies. In addition, this paper examined the impact of different types of capital sudden stops on economic growth in emerging economies. The results reveal that the impact of sudden stops of direct investment is not significant.

Little existing research considers the impact of capital sudden stops through the perspective of savings rate differences. Based on our research using the GMM model, we argue that capital sudden stops will lead to a decline in investment kinetic energy in emerging economies, and therefore, a decline in economic growth. There are also few studies on the economic effects of capital sudden stops. And the time series model is generally used in a single economy. This paper, however, uses the data from 49 emerging economies and takes the panel approach to more comprehensively study the capital sudden stops of emerging economies.

This paper investigates the long‐ and short‐run determinants of aggregate private savings in Greece employing data over the period 1961‐2000. The long‐run savings function is estimated based on an extended life‐cycle hypothesis taking into account the economic and demographic developments during this period. A long‐run saving function sensitive to fertility changes, old dependency ratio, real interest rate, liquidity and public finances is found to exist and the importance of short‐run deviations is presented using vector error‐correction model estimation. The empirical evidence suggests the existence of a stable long‐run savings function in Greece both in the long‐ and short‐run periods and the policy implications of such a relationship are presented.

The motivation for conducting this research came from the current global economic crisis. One outcome of the crisis is the awareness of the need for a better understanding of what causes people to save. Low savings rates in Western countries in general and in the USA in particular are the roots of the crisis. Furthermore, saving is probably one of the most important economic variables that impact the local and global environment. The current economic literature neglects the crucial impact that culture has on saving as a consequence we do not fully understand the causes of different saving rates in different societies. The purpose of this paper is to explore the variable of cultural attitudes as an explanation for variations in national savings rates.

The phenomenon of diminishing personal savings cannot be explained simply by the variables studied in the current economic literature, such as interest rates, age of the population and wealth as expressed by GDP per capita. This paper explores the role that cultural attributes play in affecting the level of savings in different countries. The paper uses cross‐national data to determine the effect of cultural attributes on savings rates.

Cultural variables, particularly the level of uncertainty avoidance and collectivism, have a significant impact on the level of savings. As the level of uncertainty avoidance increases, the level of national savings increases. In addition, the more collectivist the society, the higher the savings rate.

Policy makers must realize that simply changing economic factors such as interest rates may not have the desired effect of raising savings rates. They must also take into account the cultural attributes of the country when making policy.

The purpose of this paper is to contribute to the existing literature of driving and impeding switching factors by operationalizing the catalyst factor of perceived power among customers. Acknowledging the importance of trust in a financial context, a trust-based framework for the analysis is used. The study explicitly analyzes factors of importance for subsequent switching of banks for empowered customers (i.e. savers) and low-on-power customers (i.e. borrowers).

The study measures factors driving or impeding switch of service provider, together with measures of trust and power using online survey methods. The sample is intended to focus on savers and borrowers, defined quantitatively as well as perception wise. Through a multi-group SEM analysis, differences between the samples of savers and borrowers are analyzed. The dependent variable was in both cases inclination to switch.

The paper manages to define differences between empowered and less empowered customers, such as borrowers and savers. The mediating effect of trust prevails only for borrowers: here, the only effect on switching behavior stems from a full mediation of stability through trust. For savers, direct influences of both service failure and lack of involvement on trust are of major importance. The importance of trust, however, is lacking; for the sample of savers, the link between trust and switching behavior is insignificant.

The results may be used as a tool box in order to address consumer switching behavior and mobility in the financial services market. The biggest obstacle for switching banks among savers is the low level of involvement. This has clear implications regarding how to increase switching, e.g., by raising interest. Focusing instead on borrowers, stability of the chosen financial institution turned out to be the most important factor.

This paper introduces a view on consumer switching behavior, taking into account differences regarding service provider relations (empowered savers vs less empowered borrowers) and the importance of trust in these two settings. The paper introduces trust as a mediator between switching behavior and four determinants: stability, personal relations, service failure and internet-related issues, and involvement.

Within the last two decades, the Japanese economic machine has caught up, if not overtaken, the US as the world′s leading economy. Japan has virtually conquered the American consumer electronics, semiconductor, and machine tool marketplace and, except for quotas, would have done the same for the automotive segment. One of the reasons given is of the Japanese innovative abilities. How truly innovative are the Japanese? In what ways do they innovatively prosper and struggle? Examines the innovative process in Japan, its advantages and disadvantages, and projects a future scenario for the Japanese.

A recent study found state bond bank participants continually realize considerable interest cost savings. Savings were calculated as differences in interest costs of bond bank loans and the bond offerings participants would have sold as alternatives to loans, (alternative market offerings). The present evaluation determines the sources of the savings. Savings are generated by not only differences in issue characteristics of bond bank issues and alternative market offerings, but also differential impacts of the same market forces and institutional factors on the interest costs of both types of sales. These findings verify that bond bank issues and alternative market offerings sell in different sub-markets, and confirm municipal bond market segmentation.

The purpose of this study is to find out the effect of consumption tax on savings behavior especially on the people who are close to their retirement.

The authors analyze the response in spending and retirement saving using a difference-in-differences regression methodology. The authors use the year since the Public Provident Fund (PPF) enrollment date for each individual as a random assignment to identify the service tax policy's causal impact. Therefore, this variable is a continuous variable defined as an individual's age until the end of the restrictions when people can withdraw money from their retirement savings account PPF without any penalty. The treatment variable is the service tax shock (increase in service tax) that happened effective 1st April 2015.

The authors find a significant effect of a change in the service tax rate on individuals' spending and PPF saving behavior. On average, individuals lower their consumption by about 14% and increase their PPF savings by 16% in response to the increase in the service tax rate. The authors find substantial heterogeneity in effect across different types of individuals. The effect is more pronounced for people closer to their retirement and needy people (defined as individuals with low traditional savings account balances).

The authors studied the effect of consumption tax on one category of savings (PPF) only. There are other savings instruments available in India. The data for those were not available to us.

This paper not only throws light on the consumption and savings behaviour of the individuals, but will also help the policy maker for framing appropriate fiscal policy.

Using a unique and proprietary data from a large bank in India, the authors analyze the effect of a tax policy change on households' consumption and retirement savings behavior. The authors find that households reduce their consumption by 14% and increase their voluntary retirement savings (Public Provident Fund aka PPF) by 16% in response to an increase in the service tax policy. Individuals close to their retirement age (55 years of age and above) and without any withdrawal restrictions from their PPF account tend to reduce their expenditures more and save more. Individuals with financial constraints and withdrawal restrictions do not reduce their expenditures significantly. To the best of the authors’ knowledge no study was done on this.

Trade relations between China and the USA have been marked by conflict, especially since China’s membership in the World Trade Organization (WTO). These conflicts have been analyzed from a variety of perspectives, including the loss of jobs in the USA due to Chinese imports, competition in high technology sectors and the balance of trade. Conceptual frameworks have employed models of domestic differences as well as models of international power distribution. Among domestic differences examined are the existence of state-owned enterprises in China compared to the domination of the USA economy by private firms, the large role of the Communist Party in China and the influence of labor and environmental and labor groups in the USA. Power distribution theories focus on the systemic effects of the distribution of power on trade openness and on the pattern of intra-bloc versus between-bloc trade. This paper aims to examine the role of macroeconomic policy factors in China and the USA, in particular, the role of national patterns of savings, investment and consumption (both private and government). The paper concludes that insofar as the balance of trade is an important component of the trade conflict, domestic macroeconomic factors continue to be important. The resolution of the conflict will have to take into account the respective macroeconomic policies of China and the USA.

The design is an analytic case study of US–China trade relations with a particular focus on the balance of trade. The conceptual framework employed involves an analysis of macroeconomic policy categories, especially the overall pattern of savings (household, firm and government), investment and consumption. Process tracing over time since China's membership in the WTO is carried out with an eye toward the relationship between the balance of trade and macroeconomic policy.

The main findings are that there is a strong relation between the respective macroeconomic policies of the USA and China and their trade relations. The domestic political economy of the USA encourages consumption and a low rate of savings. The opposite is true of China where household income is low by design and national savings are high. China depends on the USA to consume what is not consumed domestically. The USA depends on Chinese imports for additional consumption encouraged by its low rate of savings. The two economies are locked in a mutual dependence.

Key research implications are that there should be more focus on domestic macroeconomic policies since these are the root causes of the trade imbalance. This is not to say that trade frictions centering on jobs, subsidies and competition in high technology are unimportant. However, without the resolution of differences in the management of macroeconomic policies, trade conflicts between the USA and China will continue.

Practical implications are huge, in some ways much more important than the academic implications. Macroeconomic policy differences in savings, investment, government spending, taxation and infrastructure are important. Furthermore, there are available tools in both China and the USA to manage the macroeconomy, particularly, monetary and fiscal policy.

One implication of this paper is that satisfaction or dissatisfaction of workers is dependent on income distribution which in turn affects trade. Treatment of people in different socioeconomic categories, such as the elderly, the young, and those at working age are a function of macroeconomic policies.

Many people have written about macroeconomics. It is a conventional subfield of economics. The originality of this paper lies in its advocacy of a shift of focus and attention and in the argument that traditional macroeconomics is related to trade. Despite its importance, macroeconomics has not been the center of attention for most political scientists, though economists have made it more central.

THE CAUSES AND EFFECTS OF DISINTERMEDIATION Disintermediation is a relatively new term on the financial scene in America. The term was first coined in mid‐1966 and has since, to the dismay of many, become part of the daily vocabulary of bankers and economists. Originally, it sprang up to describe the outflow of funds from deposits at financial intermediaries (commercial banks, savings and loan associations and mutual savings banks) to investments yielding a higher return. Since that time, disintermediation, has taken on several additional forms such as fractional disintermediation, which addresses differences between the maximum interest rate that can be paid on a time deposit with a specified maturity at a financial intermediary and the interest rates prevailing on the similar instruments in the open market. Another new form of savings outflow is passbook disintermediation which will be discussed later. No matter which form of disintermediation is addressed, the same difficulty exists for the depository institutions — how to remain competitive when interest rates rise above the maximum ceiling rates allowed by law.

The purpose of this paper is to explore the impact of regulation on previously unregulated banks’ balance-sheet growth using the 1880 Danish Savings Bank Act as a natural experiment. With the Act, Danish savings banks became, for the first time, subject to regulation and supervision whereas commercial banks continued as unregulated institutions.

The main elements of the Act focussed on supervision and provisions to improve information transparency. The paper estimates the impact of the Act on the balance-sheet growth of Danish savings banks using bank-level panel data and a difference-in-differences approach.

The paper finds no indications that the Act had a negative effect on the balance-sheet growth of savings banks compared to commercial banks in the short run. Furthermore, there are indications of a positive effect after a couple of years. This suggests that regulation is not always a burden for the regulated institutions and might even have a positive impact on their business activity.

This paper is the first study using the introduction of banking supervision and regulation in the 1800s as a natural experiment to evaluate the causal effect of regulation on the balance-sheet growth of previously unregulated financial intermediaries.