CAN AN INCREASE IN NATIONAL SAVING REDUCE THE LEVEL OF UNEMPLOYMENT IN AUSTRALIA

The savings to GDP ratio is considerably lower in Australia than the O ECD average, The lower level of savings does not only result in a curr ent account deficit but also has a negative relationship with the unem ployment rate. In order to overcome this problem, the Australian gover nment has recently adopted policies which are designed to increase the level of savings in the economy. An examination of the impact of thes e policies on unemployment shows that an increase in the level of savi ngs would not be sufficient to reduce unemployment rates in Australia.