The major objective of this study has been to analyze the
savings behavior in Korea during the 1953-72 period in
comparison to Taiwan and Japan with a view to formulating a
framework for out projections of the domestic saving propensity
for the years 1973-1981.
As for a framework of analysis, we habe developed two
models. The first is Mckinnon's model which stresses the role
of money as a conduit through which capital accumulation takes
place in LDCs and the role of financial institutions as an
intermediary between savers and investors. The major variables
that enter the savings function in Mckinnon's model are the rate
of growth and the real deposit rate. The latter variable may be
substituted for by the money-income ration under certain
assumption. The second model is based on the Neo-Keynesian
view of saving and investment. In this model, real domestic
savings depend upon the real return on money and a variable
reflecting the intermediation efficiency of the banking industry.
We habe tested these models using the time-series data of
Korea, Japan, and Taiwan. And regression results suggest that
these models explain the savings behavior in all three countries
quite well. however regression result, being what they are, must
be intrepreted with some caution: our results are meant to be
suggestive, not conclusive.
We have also used some of the estimated savings functions
in our projections of the potential saving propensity for the
years 1973-81. While we are prepared to concede that the
projection process is extremely naive and subject to many
limitations, out projections do indicate that the saving
propensity(approximately 27% in 1984) required for the target
values of $1,000 per capita and $ 10 billion exports in 1980 is
not a figure beyond our reach. On the contrary, it appears to be
a relatively easy target to be attained.
The next step of our study would then be to refine our
models and projection method and also consider some other
models to see whether we are overly optimistic. Also, it would
be helpful if we could compare our results with those of other
general equilibrium forecasting models, provided, of course, one's
preference is such that he still has faith in these econometirc
models even at this stage of the econometric game.