IDEAS home Printed from https://ideas.repec.org/p/diw/diwwpp/dp372.html
   My bibliography  Save this paper

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

Author

Listed:
  • 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.

Suggested Citation

  • Mechthild Schrooten & Sabine Stephan, 2003. "Private Savings in Eastern European EU-Accession Countries: Evidence from a Dynamic Panel Data Model," Discussion Papers of DIW Berlin 372, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp372
    as

    Download full text from publisher

    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.40789.de/dp372.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Paxson, Christina, 1996. "Saving and growth: Evidence from micro data," European Economic Review, Elsevier, vol. 40(2), pages 255-288, February.
    2. Grigoli, Francesco & Herman, Alexander & Schmidt-Hebbel, Klaus, 2018. "Saving in the world," World Development, Elsevier, vol. 104(C), pages 257-270.
    3. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    4. Dani Rodrik, 2000. "Saving Transitions," The World Bank Economic Review, World Bank, vol. 14(3), pages 481-507, September.
    5. Yongcheol Shin & Ron P Smith & Mohammad Hashem Pesaran, 1998. "Pooled Mean Group Estimation of Dynamic Heterogeneous Panels," Edinburgh School of Economics Discussion Paper Series 16, Edinburgh School of Economics, University of Edinburgh.
    6. Mr. Peter J Montiel & Mr. Eduardo Borensztein, 1991. "Savings, Investment, and Growth in Eastern Europe," IMF Working Papers 1991/061, International Monetary Fund.
    7. de Melo, Martha & Denizer, Cevdet & Gelb, Alan, 1996. "Patterns of Transition from Plan to Market," The World Bank Economic Review, World Bank, vol. 10(3), pages 397-424, September.
    8. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    9. Tullio Jappelli & Marco Pagano, 1994. "Saving, Growth, and Liquidity Constraints," The Quarterly Journal of Economics, Oxford University Press, vol. 109(1), pages 83-109.
    10. Norman Loayza & Klaus Schmidt-Hebbel & Luis Servén, 2000. "What Drives Private Saving Across the World?," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 165-181, May.
    11. S. Fisher & R. Sahay & C. A. Vegh, 1997. "Stabilization and Growth in Transition Economies: The Early Experience," Voprosy Ekonomiki, NP Voprosy Ekonomiki, vol. 5.
    12. Stephen R. Bond, 2002. "Dynamic panel data models: a guide to micro data methods and practice," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 1(2), pages 141-162, August.
    13. Jeannine Bailliu & Helmut Reisen, 1998. "Do funded pensions contribute to higher aggregate savings? A cross-country analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 134(4), pages 692-711, December.
    14. International Monetary Fund, 2000. "Republic of Poland: Selected Issues," IMF Staff Country Reports 2000/060, International Monetary Fund.
    15. Orazio P. Attanasio & Lucio Picci & Antonello E. Scorcu, 2000. "Saving, Growth, and Investment: A Macroeconomic Analysis Using a Panel of Countries," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 182-211, May.
    16. Campos, Nauro F., 2001. "Will the Future Be Better Tomorrow? The Growth Prospects of Transition Economies Revisited," Journal of Comparative Economics, Elsevier, vol. 29(4), pages 663-676, December.
    17. Feldstein, Martin & Horioka, Charles, 1980. "Domestic Saving and International Capital Flows," Economic Journal, Royal Economic Society, vol. 90(358), pages 314-329, June.
    18. Sebastian Edwards, 1995. "Why are Saving Rates so Different Across Countries?: An International Comparative Analysis," NBER Working Papers 5097, National Bureau of Economic Research, Inc.
    19. Edwards, Sebastian, 1996. "Why are Latin America's savings rates so low? An international comparative analysis," Journal of Development Economics, Elsevier, vol. 51(1), pages 5-44, October.
    20. Cevdet Denizer & Holger C. Wolf, 2000. "The Saving Collapse during the Transition in Eastern Europe," The World Bank Economic Review, World Bank, vol. 14(3), pages 445-455, September.
    21. de Melo, Martha & Denizer, Cevdet & Gelb, Alan, 1996. "From plan to market : patterns of transition," Policy Research Working Paper Series 1564, The World Bank.
    22. International Monetary Fund, 1999. "Neglected Heterogeneity and Dynamics in Cross-Country Savings Regressions," IMF Working Papers 1999/128, International Monetary Fund.
    23. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    24. Judson, Ruth A. & Owen, Ann L., 1999. "Estimating dynamic panel data models: a guide for macroeconomists," Economics Letters, Elsevier, vol. 65(1), pages 9-15, October.
    25. Cevdet Denizer & Holger C. Wolf, 1998. "Household Savings in Transition Economies," NBER Working Papers 6457, National Bureau of Economic Research, Inc.
    26. Mr. Stanley Fischer & Mr. Carlos A. Végh Gramont & Ms. Ratna Sahay, 1996. "Stabilization and Growth in Transition Economies: The Early Experience," IMF Working Papers 1996/031, International Monetary Fund.
    27. Mr. Tim Callen & Mr. Christian Thimann, 1997. "Empirical Determinants of Household Saving: Evidence From OECD Countries," IMF Working Papers 1997/181, International Monetary Fund.
    28. Loayza, Norman & Schmidt-Hebbel, Klaus & Serven, Luis, 2000. "What drives private saving around the world?," Policy Research Working Paper Series 2309, The World Bank.
    29. Haque, N. U. & Pesaran, M. H. & Sharma, Sunil, 1999. "Neglected Heterogeneity and Dynamics in Cross-country Savings Regressions," Cambridge Working Papers in Economics 9904, Faculty of Economics, University of Cambridge.
    30. Stephen Bond, 2002. "Dynamic panel data models: a guide to microdata methods and practice," CeMMAP working papers CWP09/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. Merike Kukk & Karsten Staehr, 2017. "Macroeconomic Factors in the Dynamics of Corporate and Household Saving: Evidence from Central and Eastern Europe," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 53(11), pages 2585-2608, November.
    3. Offe, Claus & Fuchs, Susanne, 2007. "Welfare state formation in the enlarged European union – Patterns of reform in the post-communist new member states [Die Entwicklung von Wohlfahrtsstaaten in der erweiterten Europäischen Union – Re," Discussion Papers, Research Unit: Global Governance SP IV 2007-306, WZB Berlin Social Science Center.
    4. 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.
    5. Merike Kukk & Karsten Staehr, 2015. "Macroeconomic factors in corporate and household saving. Evidence from Central and Eastern Europe," Bank of Estonia Working Papers wp2015-5, Bank of Estonia, revised 30 Dec 2015.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Mechthild Schrooten & Sabine Stephan, 2002. "Back on Track?: Savings Puzzles in EU-Accession Countries," Discussion Papers of DIW Berlin 306, DIW Berlin, German Institute for Economic Research.
    3. Mechthild Schrooten & Sabine Stephan, 2005. "Private savings and transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(2), pages 287-309, April.
    4. Loayza, Norman & Schmidt-Hebbel, Klaus & Serven, Luis, 2000. "What drives private saving around the world?," Policy Research Working Paper Series 2309, The World Bank.
    5. Andreas Freytag & Sebastian Voll, 2013. "Institutions and savings in developing and emerging economies," Public Choice, Springer, vol. 157(3), pages 475-509, December.
    6. Walther, Herbert & Stiassny, Alfred, 2013. "International Comparisons of Household Saving Rates and Hidden Income," Department of Economics Working Paper Series 148, WU Vienna University of Economics and Business.
    7. Abdur R Chowdhury, 2004. "Private Savings in Transition Economies: Are there Terms of Trade Shocks?," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 46(4), pages 487-514, December.
    8. Grigoli, Francesco & Herman, Alexander & Schmidt-Hebbel, Klaus, 2018. "Saving in the world," World Development, Elsevier, vol. 104(C), pages 257-270.
    9. Herbert Walther & Alfred Stiassny, 2013. "International Comparisons of Household Saving Rates and Hidden Income," Department of Economics Working Papers wuwp148, Vienna University of Economics and Business, Department of Economics.
    10. Mr. Francesco Grigoli & Alexander Herman & Klaus Schmidt-Hebbel, 2014. "World Saving," IMF Working Papers 2014/204, International Monetary Fund.
    11. Eicher, Theo S. & Schreiber, Till, 2010. "Structural policies and growth: Time series evidence from a natural experiment," Journal of Development Economics, Elsevier, vol. 91(1), pages 169-179, January.
    12. Kam-Ki Tang & Benjamin ShiJie Wong, "undated". "The Ageing, Longevity and Crowding Out Effects on Private and Public Savings: Evidence from Dynamic Panel Analysis," MRG Discussion Paper Series 3409, School of Economics, University of Queensland, Australia.
    13. Theo Eicher & Till Schreiber, 2010. "Institutions and Growth: Time Series Evidence from Natural Experiments," Working Papers UWEC-2007-15-P, University of Washington, Department of Economics.
    14. Philemon Kwame Opoku, 2019. "The Short-Run and Long-Run Determinants of Household Saving:Evidence from OECD countries," Working Papers REM 2019/0110, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    15. Adema, Yvonne & Pozzi, Lorenzo, 2015. "Business cycle fluctuations and household saving in OECD countries: A panel data analysis," European Economic Review, Elsevier, vol. 79(C), pages 214-233.
    16. Eichler, Stefan & Pyun, Ju Hyun, 2022. "Ricardian equivalence, foreign debt and sovereign default risk," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 21-49.
    17. Philemon Kwame Opoku, 0. "The Short-Run and Long-Run Determinants of Household Saving: Evidence from OECD Economies," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 0, pages 1-35.
    18. Michele Gragnolati & Ole Hagen Jorgensen & Romero Rocha & Anna Fruttero, 2011. "Growing Old in an Older Brazil : Implications of Population Ageing on Growth, Poverty, Public Finance, and Service Delivery," World Bank Publications - Books, The World Bank Group, number 2351, December.
    19. Philemon Kwame Opoku, 2020. "The Short-Run and Long-Run Determinants of Household Saving: Evidence from OECD Economies," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 62(3), pages 430-464, September.
    20. Andrés Rius & Carolina Román, 2021. "Countries in the hamster’s wheel?: Nurkse- Duesenberry demonstration effects and the determinants of saving," Revista Cuadernos de Economia, Universidad Nacional de Colombia, FCE, CID, vol. 40(82), pages 193-225, February.

    More about this item

    Keywords

    Dynamic panel data model; private savings; Eastern European EU-accession countries; GMM estimator;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:diw:diwwpp:dp372. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bibliothek (email available below). General contact details of provider: https://edirc.repec.org/data/diwbede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.