Saving and Real Interest Rates in Brazil

摘要: This paper presents a critical analysis of governments' attempts to increase national and private savings by raising the real rate return on financial assets. Using Brazilian economy as case study, argues that successes in increasing can be traced fiscal reforms accompanied process system redesign sought free interest rates from administrative controls. Two types econometric exercises are performed offer evidence responsiveness changes expected rate. The first one uses standard saving function approach evaluating magnitude elasticity savings. second test addresses issue using Euler equation technique measuring intertemporal substitution consumption. results obtained both sections point negligible effect aggregate sector saving. These have important implications for design stabilization structural reform programs they contradict fundamental behavioral hypothesis underlying policy advice most often given developing economies international organizations like World Bank IMF.