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Private Savings in Eastern European EU-Accession Countries: Evidence from a Dynamic Panel Data Model

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  • Mechthild Schrooten
  • Sabine Stephan

Abstract

After the collapse in early transition years, saving rates in Eastern European EUaccession countries have recovered strongly. Is private saving in these countries now driven by the same forces as in the EU? A GMM estimator is applied to analyze the determinants of private saving in both country groups. Main results are: saving rates are persistent; income growth increases saving, whereas public saving crowds out private saving. Domestic saving and foreign capital operate as substitutes. Long-run effects of income growth and public saving are larger in the EU than in the candidate countries, indicating that saving behavior in the EU is determined to a larger extent by long-run perspectives than in the candidate countries.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.40789.de/dp372.pdf
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Bibliographic Info

Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 372.

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Length: 36 p.
Date of creation: 2003
Date of revision:
Publication status: Published in: Economics of Transition 13 (2005), 287-309
Handle: RePEc:diw:diwwpp:dp372

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Keywords: Dynamic panel data model; private savings; Eastern European EU-accession countries; GMM estimator;

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Cited by:
  1. Rabinovich, Anna & Webley, Paul, 2007. "Filling the gap between planning and doing: Psychological factors involved in the successful implementation of saving intention," Journal of Economic Psychology, Elsevier, vol. 28(4), pages 444-461, August.
  2. Mechthild Schrooten & Sabine Stephan, 2004. "Does Macroeconomic Policy Affect Private Savings in Europe?: Evidence from a Dynamic Panel Data Model," Discussion Papers of DIW Berlin 431, DIW Berlin, German Institute for Economic Research.
  3. Offe, Claus & Fuchs, Susanne, 2007. "Welfare state formation in the enlarged European union – Patterns of reform in the post-communist new member states," Discussion Papers, Research Unit: Global Governance SP IV 2007-306, Social Science Research Center Berlin (WZB).

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