The Evolution of Savings in Brazil Since 1960 : The Role of Real Interest Rates

Brazilian economic history has some peculiarities, the way that events happen in that country is not so obvious as expected. One of them is the performance of real saving rates that are low even when real interest rates are high. A classical saving function was estimated in order to understand the relation between real saving rates and real interest rates. Daniel Gleizer assesses that policies to strengthen national and private savings by increasing the real interest rate did not occur in Brazil because there was not any significant relation between these variables, in the period of 1960-1985. However, using one of his econometric models to examine the sensitivity of savings and changes in expected real interest rate in the period of 1960-2011, we conclude that there is a negative and significant relation between them, probably due to economic, political and social stability recently achieved. Economic stability provided the economic development that caused structural changes in the Brazilian society.