Does income drive saving?: Exogeneity testing applied to East Asian Data

Many economic models have been developed which have had as their primary goal the elucidation and accurate prediction of economic growth patterns. In these models we frequently discover that many of the variables which determine growth are themselves determined by growth. Saving (investment) is one such variable. In the process of estimating a model, a commitment as to the casual ordering of variables must be made. The causal ordering is typically made on a priori grounds. In this paper I give the data themselves a chance to speak to the issue of whether income drives saving (investment) or vice versa within the context of a simple, but familiar bivariate saving-income model.