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This paper investigates the long-run pattern of private saving in Indonesia, Malaysia, Singapore and Thailand. These countries have not only maintained saving levels that are currently among the highest in the world, but have also experienced a sustained increase in their rate of private saving over the past twenty years. Using a cointegration approach, this paper empirically examines the economic determinants underlying the saving trends in this group and the extent to which these countries share a common experience with respect to the factors accounting for their strong saving performance. The findings suggest that demographic shifts and, to a somewhat lesser extent, rising per capita incomes have been important factors underlying regional saving trends, with broadly similar long-run impacts across countries. Limited evidence to support a significant and common relation between compulsory and total saving in Singapore and Malaysia is also found.* The authors thank Peter Clark, Ken Bercuson and an anonymous referee of this journal for useful comments and discussions. The views expressed are those of the authors and do not necessarily represent those of the International Monetary Fund. Any remaining errors are the responsibility of the authors. 1. See World Bank (1993) for a cross-country study of the high-performing economies of East Asia.2. Specifically, they examine the long-run impact of the dependency ratio and the public debt ratio (relative to the remaining G7 countries) on the net foreign asset position of the United States, Germany and Japan. For a broad study on saving trends in OECD countries see Dean et al. (1990) and the references cited therein. 3. Bloom and Williamson (1997), for example, find that population dynamics accounted for 1.4 to 1.9 percentage points of East Asia's average annual per capita GDP growth during 1965-90. Higgins and Williamson (1997) argue that had the age profile in East and Southeast Asia not changed between the early 1970s and early 1990s, saving rates would actually have declined.

Drawing on new data and advances in exchange rate regimes' classification, we find that countries appear to benefit by having increasingly flexible exchange rate systems as they become richer and more financially developed. For developing countries with little exposure to international capital markets, pegs are notable for their durability and relatively low inflation. In contrast, for advanced economies, floats are distinctly more durable and also appear to be associated with higher growth. For emerging markets, our results parallel the Baxter and Stockman classic exchange regime neutrality result, though pegs are the least durable and expose countries to higher risk of crisis.