The Macroeconomic and Demographic Determinants of Saving Behavior in Selected Countries of Asia

This research study examines macroeconomic and demographic factors that affect the gross domestic savings of highly youth population countries of Asia by taking data from 1990 to 2019. The countries considered in our study are Pakistan, India, China, Indonesia and Bangladesh. For this purpose, long-run coefficients are estimated using the Fully Modified Ordinary Least Square (FMOLS) estimation method to calculate the coefficients of the variables with heterogeneous standard errors. According to the estimated results, all the variables significantly impact gross domestic savings. The study results revealed that macroeconomic and demographic determinants significantly affect the gross domestic savings of sampled countries. Macroeconomic variables like GDP per capita and interest rate positively affected savings. While inflation is negatively affecting them. Especially, demographic factors like the dependency ratio negatively affect the gross domestic savings in sample countries. While infant mortality rate and urbanization are reported as the positive determinants of savings.