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Private saving in India and Malaysia compared: the roles of financial liberalization and expected pension benefits

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  • James Ang

    ()

  • Kunal Sen

    ()

Abstract

In this paper, we provide a comparative account of the evolution of private saving in India and Malaysia, and analyze how policy changes in the financial sectors and pension systems help explain differences in their saving performance. Using the ARDL bounds estimation procedure, we find a fairly robust long-run relationship between private saving and its determinants in both countries. Consistent with the predictions made in the life cycle model, our results indicate that higher income growth stimulates private saving and an increase in age dependency retards private saving. The results provide some support for the hypothesis that financial liberalization results in lower private saving in both countries. The evidence also indicates that expected pension benefits tend to stimulate private saving in India, but that the reverse is found in Malaysia.

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Bibliographic Info

Article provided by Springer in its journal Empirical Economics.

Volume (Year): 41 (2011)
Issue (Month): 2 (October)
Pages: 247-267

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Handle: RePEc:spr:empeco:v:41:y:2011:i:2:p:247-267

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Related research

Keywords: Private savings; Pension saving; Financial liberalization; India; Malaysia; O16; O53;

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Cited by:
  1. Ang, James, 2010. "Savings Mobilization, Financial Development and Liberalization: The Case of Malaysia," MPRA Paper 21718, University Library of Munich, Germany.

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