In a world where money flows easily across national borders, does savings still matter for growth?

Here's a simple and stupid experiment. Take the industrialized countries. If you knew which ones had a higher national savings rate in 1995, could you predict which ones would have better economic performance over the next ten years? Maybe not.

                   increase in real per capita GDP
                                       1995-2005               
      Low savings countries             26.9%
      Medium savings countries          30.1%
      Medium savings countries
        (except Ireland)*               23.0%
      High savings countries            21.4%
      
Not much benefit to being a big saver, is there?


Low savings countries (national savings rate less than 20% in 1995) are United Kingdom, United States, New Zealand,Iceland,Australia, Greece,Canada,and France.

Medium savings countries (national savings rate between 20% and 25% in 1995) are Denmark, Sweden, Ireland, Austria, Italy, Germany, Finland, and Spain.

High savings countries (national savings rate above 25% in 1995) are Belgium, Norway, Netherlands, Japan, Switzerland, and Korea.

*Ireland is an outlier in terms of its per capita GDP growth, so it may make more sense to omit it from the group.

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