Unformatted text preview: adds that growth has also been weakened by
increasingly pessimistic expectations about the future. This, in turn, has led to the emergence of a
massive savings–investment imbalance.
Japan has traditionally been a high-saving country,
as shown in Robert Dekle’s article in this issue.
Gross national savings have regularly exceeded 30
per cent of GDP since at least the early 1960s
(Table 2), well above a 20–22 per cent OECD
average. In the so-called ‘high-growth period’ of
the 1960s and early 1970s, savings went almost
exclusively into business capital formation. Since the
slow-down of the mid-1970s, however, they have
increasingly provided the counterpart to a substantial current-account surplus and to a growing domestic public-sector deficit. By the late 1990s, with
the external surplus running at close to 2 per cent of
GDP6 and the budget deficit at nearly 7 per cent,
these two outlets were absorbing as much as onethird of total savings, as against barely 3 per cent in,
for instance, the mid-1970s. 5
These estimates can be, and are, d...
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