Saving and investment under external and fiscal constraints

In this article the author examines recent trends in the coefficient of domestic saving —or the unconsumed portion of the product— in the region. He shows how it has stagnated in relation to the saving prevalent before the external debt crisis, despite the sharp decline in per capita consumption. In other words, consumption and the product have fallen in a parallel fashion. Thus austerity has been useless in raising the coefficient of saving, which would have kept the turnaround produced by the net transfer of resources abroad —which must be financed with domestic saving— from in turn resulting in a total loss of available financing for investment.