In this paper, Dr. A. Bolbol, H. Hakimian, and A. Mouradian provide a simple, standard framework to understand savings in post-war Lebanon.
In section 2 they look at the relation that ties savings to investment and the current account, and find that Lebanese national savings are fairly deficient and contribute greatly to the large and persistent current account deficits.
Section 3 investigates the culprit behind deficient savings, and they find that – contrary to general perceptions — both the private and public sectors are responsible, with private savings to GDP averaging less than 14% and revealing an unusually volatile behavior.
In section 4 they formulate the determinants of private savings and express it as dependent on policy and non-policy variables.
Section 5 provides an analysis of the policies and reforms that could be meaningfully extracted from the determinants of private savings.
And in section 6 the note concludes, stressing the need to focus on those variables that can be deployed to stimulate real economic growth, reform the pension system, and regulate fiscal policies.
Read the paper here: Lebanese Savings
Please note that a version of this paper will appear in April’s ABL Bulletin.