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What drives the savings rate in middle -income countries?

Author

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  • Błoch Wiktor

    (1 University of Lodz, Faculty of Economics and Sociology, ul. Prez. G. Narutowicza 68, 90-136, Łódź)

Abstract

The aim of this study is to examine the factors that influence the savings rate in middle-income countries and to compare the results with other studies devoted to different subgroups of countries. Among the potential determinants of savings the study considers: demography, income level, financial sector, international trade, inflation and the structure of the economy. The research sample is confined to 44 middle-income countries and covers the period between 2000 and 2019. Six model specifications are constructed using three different estimators: FE, FGLS and PCSE. In the next step, the same models are estimated using alternative dependent variables. Results suggest that industrial share in GDP has a positive impact on the savings rate. On the other hand, a negative relationship was diagnosed between the savings and unemployment rates, the share of labour compensation in GDP, military expenditure, inflation and the young dependency ratio.

Suggested Citation

  • Błoch Wiktor, 2023. "What drives the savings rate in middle -income countries?," Economics and Business Review, Sciendo, vol. 9(4), pages 56-73, December.
    • Handle: RePEc:vrs:ecobur:v:9:y:2023:i:4:p:56-73:n:6
    DOI: 10.18559/ebr.2023.4.1072
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    More about this item

    Keywords

    savings rate; Gross savings; Gross domestic savings; middle-income country;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving

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