IDEAS home Printed from https://ideas.repec.org/a/ags/eeaeje/343201.html

Domestic Resource Mobilization in Ethiopia: How Sustainable is the Current Boom in Domestic Savings?

Author

Listed:
  • Desalegn, Gashaw

Abstract

This study aims to find out if the sequential policy interventions by the government to boost domestic savings are among the main factors for the boom in such savings observed during GTPI in Ethiopia and whether the impact these interventions is permanent or short-lived. In addition, it revisits and explores the determinants of gross domestic savings. The study applies (LM) unit root test with a structural break, an ARDL modeling approach, and it also relies on an analytical review. The policy shocks applied to domestic savings have changed the long-term growth path of domestic savings permanently. In addition, macroeconomic instability, capital flight income and urbanization are the main variables that affect efforts of mobilizing domestic savings in Ethiopia. However, features of a vibrant financial sector, including secondary financial markets for an efficient use of available resources, reliability and transparency of the housing agency, and an effective demand for housing, are among the main conditions for sustained positive impacts of these policies. Accordingly, some policy recommendations are forwarded.

Suggested Citation

  • Desalegn, Gashaw, 2017. "Domestic Resource Mobilization in Ethiopia: How Sustainable is the Current Boom in Domestic Savings?," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 26(01), April.
    • Handle: RePEc:ags:eeaeje:343201
    DOI: 10.22004/ag.econ.343201
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/343201/files/Domestic%20resource%20mobilization.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.343201?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    2. Robert Engle & Clive Granger, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    3. Athukorala, Prema-chandra & Sen, Kunal, 2004. "The Determinants of Private Saving in India," World Development, Elsevier, vol. 32(3), pages 491-503, March.
    4. Kivilcim Metin Ozcan & Asli Gunay & Seda Ertac, 2003. "Determinants of private savings behaviour in Turkey," Applied Economics, Taylor & Francis Journals, vol. 35(12), pages 1405-1416.
    5. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    6. Saten Kumar & Don J. Webber, 2013. "Australasian money demand stability: application of structural break tests," Applied Economics, Taylor & Francis Journals, vol. 45(8), pages 1011-1025, March.
    7. Junsoo Lee & Mark C. Strazicich, 2013. "Minimum LM unit root test with one structural break," Economics Bulletin, AccessEcon, vol. 33(4), pages 2483-2492.
    8. Alfred A. Haug, 2002. "Temporal Aggregation and the Power of Cointegration Tests: a Monte Carlo Study," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(4), pages 399-412, September.
    9. Alfaro, Laura & Chanda, Areendam & Kalemli-Ozcan, Sebnem & Sayek, Selin, 2004. "FDI and economic growth: the role of local financial markets," Journal of International Economics, Elsevier, vol. 64(1), pages 89-112, October.
    10. Loayza, Norman & Schmidt-Hebbel, Klaus & Serven, Lui, 2000. "Ä»€Ä¹ˆåš›É‡ Æž¨Åš¨Å…¨Ä¸–Ç•Œçš„ǧ ĺºå‚¨È“„ϼŸ," Policy Research Working Paper Series 2309, The World Bank.
    11. Nelson, Charles R. & Plosser, Charles I., 1982. "Trends and random walks in macroeconmic time series : Some evidence and implications," Journal of Monetary Economics, Elsevier, vol. 10(2), pages 139-162.
    12. 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.
    13. Easterly, William, 1999. "The ghost of financing gap: testing the growth model used in the international financial institutions," Journal of Development Economics, Elsevier, vol. 60(2), pages 423-438, December.
    Full references (including those not matched with items on IDEAS)

    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. Yaya Keho, 2011. "Long‐Run Determinants Of Savings Rates In Waemu Countries: An Empirical Assessment From Ardl Bounds Testing Approach," South African Journal of Economics, Economic Society of South Africa, vol. 79(3), pages 312-329, September.
    2. repec:ipg:wpaper:2014-411 is not listed on IDEAS
    3. Bibhuti Sarker & Farid Khan, 2020. "Nexus between foreign direct investment and economic growth in Bangladesh: an augmented autoregressive distributed lag bounds testing approach," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 6(1), pages 1-18, December.
    4. Shahbaz, Muhammad & Nawaz, Kishwer & AROURI, Mohamed El Hedi & Teulon, Frédéric, 2013. "Does The Keynesian Absolute Income Hypothesis Exist in Pakistan?," MPRA Paper 47923, University Library of Munich, Germany, revised 01 Jul 2013.
    5. FERROUHI, El Mehdi & LEHADIRI, Abderrassoul, 2014. "Savings Determinants of Moroccan banks: A cointegration modeling approach," MPRA Paper 76371, University Library of Munich, Germany.
    6. Jamel Jouini, 2016. "Economic growth and savings in Saudi Arabia: empirical evidence from cointegration and causality analysis," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 23(4), pages 478-495, October.
    7. repec:agr:journl:v:2(602):y:2015:i:2(602):p:113-122 is not listed on IDEAS
    8. Kivanç Halil ARIÇ, 2015. "Determinants of savings in the APEC countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(603), S), pages 113-122, Summer.
    9. Shahbaz, Muhammad & Nawaz, Kishwar & Arouri, Mohamed & Teulon, Frédéric & Uddin, Gazi Salah, 2013. "On the validity of the Keynesian Absolute Income hypothesis in Pakistan: An ARDL bounds testing approach," Economic Modelling, Elsevier, vol. 35(C), pages 290-296.
    10. Verónica Cañal-Fernández & Julio Tascón Fernández, 2018. "The long run impact of foreign direct investment, exports, imports and GDP: evidence for Spain from an ARDL approach," Working Papers 0128, European Historical Economics Society (EHES).
    11. Brittle, Shane, 2009. "Ricardian Equivalence and the Efficacy of Fiscal Policy in Australia," Economics Working Papers wp09-10, School of Economics, University of Wollongong, NSW, Australia.
    12. Dakpogan, Arnaud & Smit, Eon, 2018. "The effect of electricity losses on GDP in Benin," MPRA Paper 89545, University Library of Munich, Germany.
    13. Charles Yuji Horioka & Akiko Terada-Hagiwara, 2016. "The Impact of Pre-marital Sex Ratios on Household Saving in Two Asian Countries: The Competitive Saving Motive Revisited," ISER Discussion Paper 0975, Institute of Social and Economic Research, The University of Osaka.
    14. Chor Foon Tang & Nai-Peng Tey, 2017. "Low fertility in Malaysia: Can it be explained?," Journal of Population Research, Springer, vol. 34(2), pages 101-118, June.
    15. Maha Kalai & Hamdi Becha & Kamel Helali, 2024. "Effect of artificial intelligence on economic growth in European countries: a symmetric and asymmetric cointegration based on linear and non-linear ARDL approach," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 13(1), pages 1-37, December.
    16. Trofimov, Ivan D., 2020. "Real Exchange Rate and the Dynamics of Services Trade Balance in the UK: A Linear and Non-linear ARDL Analysis," MPRA Paper 106703, University Library of Munich, Germany.
    17. Ismail, Aisha & Rashid, Kashif, 2013. "Determinants of household saving: Cointegrated evidence from Pakistan (1975–2011)," Economic Modelling, Elsevier, vol. 32(C), pages 524-531.
    18. Tang, Chor Foon, 2011. "Multivariate Granger Causality and the Dynamic Relationship between Health Care Spending, Income and Relative Price of Health Care in Malaysia," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 52(2), pages 199-214, December.
    19. Rosemary Stanley Taylor, 2020. "Foreign direct investment and economic growth. Analysis of sectoral foreign direct investment in Tanzania," African Development Review, African Development Bank, vol. 32(4), pages 699-717, December.
    20. Chor Foon Tang, 2015. "How Stable is the Savings-led Growth Hypothesis in Malaysia? The Bootstrap Simulation and Recursive Causality Tests," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 9(1), pages 1-17, February.
    21. Audi, Marc & Ali, Amjad, 2017. "Socio-Economic Development, Demographic Changes and Total Labor Productivity in Pakistan: A Co-Integrational and Decomposition Analysis," MPRA Paper 77538, University Library of Munich, Germany.
    22. Ali, Amjad & Ur Rehman, Hafeez, 2015. "Macroeconomic Instability and Its Impact on Gross Domestic Product: An Empirical Analysis of Pakistan," MPRA Paper 71037, University Library of Munich, Germany.

    More about this item

    Keywords

    ;

    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:ags:eeaeje:343201. 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/eeaa2ea.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.