Carroll, C. D., Overland, J., & Weil, D. N. (2000). Saving and growth with habit formation. American Economic Review, 90(3), 341-355.
Saving and growth are strongly positively correlated across countries. Recent empirical evidence suggests that this correlation holds largely because high growth leads to high saving, not the other way around. This evidence is difficult to reconcile with standard growth models, since forward-looking consumers with standard utility should save less in a fast-growing economy because they know they will be richer in the future than they ...