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The Uncertainty Effect on Household Saving Rates in Eastern Europe

Author

Listed:
  • Cristian Buzatu

    (Faculty of Economic Studies and Business Administration, Babes-Bolyai University, Cluj-Napoca, Romania)

Abstract

The paper aims to explain the role of uncertainty on household saving rates in Eastern European Countries (EEC), and to draw a comparison with more developed European economies. We consider that uncertainty plays an important role on household saving formation in EEC. For this purpose we perform a panel analysis over the period 1995-2014, for each group of countries. We consider different uncertainty indicators and a series of control variables; including macroeconomic and demographic determinants of household saving rates. As econometric model we use a fixed-effects GLS regression testing data for heteroscedasticity and contemporaneous correlation. The results underline that uncertainty expressed through people expectations has no clear influence on household saving rates in EEC, while unemployment and taxation are the main determinants. The findings of the paper can be useful for future policies aimed to increase household saving in EEC as a cheap and stable funding source of investments.

Suggested Citation

  • Cristian Buzatu, 2015. "The Uncertainty Effect on Household Saving Rates in Eastern Europe," Economic Research Guardian, Mutascu Publishing, vol. 5(1), pages 61-72, June.
    • Handle: RePEc:wei:journl:v:5:y:2015:i:1:p:61-72
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    More about this item

    Keywords

    Household saving; Saving behavior; Panel data; Uncertainty;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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