IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/2419.html
   My bibliography  Save this paper

The savings collapse during the transition in Eastern Europe

Author

Listed:
  • Denizer, Cevdet*Wolf, Holger C.

Abstract

The authors assess the presence and extent of involuntary savings by comparing the predicted savings rates of market economies with those of the pre-transition economies. On balance, predicted savings rates fell short of actual savings rates, especially for the former Soviet Union and the Baltics -- providing some support for the notion of excessive pre-transition savings. Comparing the savings behavior of market economies and transition economies, they found substantial similarities, except for a negative link between savings and GDP growth. As the fastest-growing transition economies are at the bottom of the adjustment J-curve, the finding is consistent with consumption smoothing. Finally, they explored whether differences in the extent of economic liberalization affected savings rates in the cross-section of transition economies. They found that liberalization is associated with lower savings, with a one-year lag. To the extent that liberalization is perceived as an indicator of likely future growth, this behavior is consistent with smoothing in the face of a J-curve change in output.

Suggested Citation

  • Denizer, Cevdet*Wolf, Holger C., 2000. "The savings collapse during the transition in Eastern Europe," Policy Research Working Paper Series 2419, The World Bank.
    • Handle: RePEc:wbk:wbrwps:2419
    as

    Download full text from publisher

    File URL: http://documents.worldbank.org/curated/en/577921468751812777/pdf/multi-page.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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.
    2. Susan M. Collins, 1991. "Saving Behavior in Ten Developing Countries," NBER Chapters, in: National Saving and Economic Performance, pages 349-376, National Bureau of Economic Research, Inc.
    3. Mr. Carlos A. Végh Gramont & Ms. Ratna Sahay, 1995. "Inflation and Stabilization in Transition Economies: A Comparison with Market Economies," IMF Working Papers 1995/008, International Monetary Fund.
    4. Portes, Richard, 1986. "The Theory and Measurement of Macroeconomic Disequilibrium in Centrally Planned Economies," CEPR Discussion Papers 91, C.E.P.R. Discussion Papers.
    5. 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.
    6. Easterly, William & Fischer, Stanley & DEC, 1994. "The Soviet economic decline : historical and republican data," Policy Research Working Paper Series 1284, The World Bank.
    7. Bennett, John & Boycko, Maxim, 1995. "Savings and Stabilization Policy in a Pre-Post-Socialist Economy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(3), pages 907-919, August.
    8. David G. Tarr, 2017. "The Terms-of-Trade Effects of Moving to World Prices on Countries of the Former Soviet Union," World Scientific Book Chapters, in: Trade Policies for Development and Transition, chapter 12, pages 271-294, World Scientific Publishing Co. Pte. Ltd..
    9. 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.
    10. Masson, Paul R & Bayoumi, Tamim & Samiei, Hossein, 1998. "International Evidence on the Determinants of Private Saving," The World Bank Economic Review, World Bank, vol. 12(3), pages 483-501, September.
    11. Jonathan D. Ostry & Carmen M. Reinhart, 1992. "Private Saving and Terms of Trade Shocks: Evidence from Developing Countries," IMF Staff Papers, Palgrave Macmillan, vol. 39(3), pages 495-517, September.
    12. 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.
    13. de Melo, Martha & Denizer, Cevdet & Gelb, Alan, 1996. "From plan to market : patterns of transition," Policy Research Working Paper Series 1564, The World Bank.
    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. 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.
    4. Dumitru, Ionut & Mircea, Romulus & Jianu (Dumitru), Ionela, 2011. "Economisirea în România – evoluţii şi factori determinanţi [Savings in Romania - developments and fundamentals]," MPRA Paper 29027, University Library of Munich, Germany.
    5. Mechthild Schrooten & Sabine Stephan, 2001. "Savings in Central Eastern Europe," Discussion Papers of DIW Berlin 250, DIW Berlin, German Institute for Economic Research.
    6. Treier, Volker, 2001. "Steuerwettbewerb in Mittel- und Osteuropa: Eine Einschätzung anhand der Messung effektiver Grenzsteuersätze," BERG Working Paper Series 36, Bamberg University, Bamberg Economic Research Group.
    7. Aleksandra Kolasa & Barbara Liberda, 2014. "Determinants of saving in Poland: Are they different than in other OECD countries?," Working Papers 2014-13, Faculty of Economic Sciences, University of Warsaw.
    8. Aleksander Aristovnik, 2006. "Current Account Reversals and Persistency in Transition Regions," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 9(1), pages 1-43, May.
    9. 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.
    10. Aleksander Aristovnik, 2005. "Twin Deficits Hypothesis And Horioka-Feldstein Puzzle In Transition Economies," International Finance 0510020, University Library of Munich, Germany.
    11. 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.
    12. Ramiz Rahmanov, 2015. "Banking Sector Development and Household Saving in Emerging Eastern Europe," William Davidson Institute Working Papers Series wp1089, William Davidson Institute at the University of Michigan.
    13. Sõrg, Mart & Tuusis, Danel, 2008. "Foreign banks increase the social orientation of Estonian financial sector," Wirtschaftswissenschaftliche Diskussionspapiere 01/2008, University of Greifswald, Faculty of Law and Economics.
    14. Radulescu, Magdalena, 2006. "The Impact of the National Bank of Romania's Monetary Policy on the Banking Credits, the Domestic Savings and Investments (As Compared to the Other Central and Eastern European Countries)," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 3(2), pages 10-31, June.
    15. 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.
    16. Shida, Yoshisada, 2015. "Forced Savings in the Soviet Republics: Re-examination," RRC Working Paper Series 54, Russian Research Center, Institute of Economic Research, Hitotsubashi University.

    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. 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.
    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, 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.
    4. 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.
    5. Agenor, Pierre-Richard & Aizenman, Joshua, 2004. "Savings and the terms of trade under borrowing constraints," Journal of International Economics, Elsevier, vol. 63(2), pages 321-340, July.
    6. Norman Loayza & Klaus Schmidt-Hebbel & Luis Servén, 2001. "Una Revisión del COmportamiento y de los determinantes del ahorro en el mundo," Central Banking, Analysis, and Economic Policies Book Series, in: Felipe Morandé & Rodrigo Vergara & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Edit (ed.),Análisis Empírico del Ahorro en Chile, edition 1, volume 1, chapter 2, pages 13-48, Central Bank of Chile.
    7. Chowdhury, Abdur, 2015. "Terms of trade shocks and private savings in the developing countries," Journal of Comparative Economics, Elsevier, vol. 43(4), pages 1122-1134.
    8. 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.
    9. 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.
    10. Marwan Abdul-Malik Thanoon & Ahmad Zubaidi Baharumshah & Abd. Aziz Abd. Rahman, 2006. "Malaysia: from economic recovery to sustained economic growth," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 28(2), pages 295-315, January.
    11. Ferrucci, Gianluigi & Miralles, Cesar, 2007. "Saving behaviour and global imbalances: the role of emerging market economies," Working Paper Series 842, European Central Bank.
    12. Ariane Tichit, 1998. "Reprise économique dans les pays post-communistes : application d'un modèle de durée," Économie et Prévision, Programme National Persée, vol. 136(5), pages 73-92.
    13. Rabindra Bhandari & Dharmendra Dhakal & Gyan Pradhan & Kamal P. Upadhyaya, 2007. "Determinants of Private Saving in South Asia," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 8(2), pages 205-217, December.
    14. Ken Chamuva Shawa, 2016. "Drivers Of Private Saving In Sub-Saharan African Countries," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 41(2), pages 77-110, June.
    15. M. Castro Campos & C. Kool & J. Muysken, 2013. "Cross-Country Private Saving Heterogeneity and Culture," De Economist, Springer, vol. 161(2), pages 101-120, June.
    16. Ashoka Mody & Franziska Ohnsorge & Damiano Sandri, 2012. "Precautionary Savings in the Great Recession," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 60(1), pages 114-138, April.
    17. Stijn Rocher & Michael Stierle, 2015. "Household saving rates in the EU: Why do they differ so much?," Working Papers 2015.01, International Network for Economic Research - INFER.
    18. Aleksandra Kolasa & Barbara Liberda, 2014. "Determinants of saving in Poland: Are they different than in other OECD countries?," Working Papers 2014-13, Faculty of Economic Sciences, University of Warsaw.
    19. Juann H. Hung & Rong Qian, 2010. "Why Is China's Saving Rate So High? A Comparative Study of Cross-Country Panel Data: Working Paper 2010-07," Working Papers 21920, Congressional Budget Office.
    20. Schweickert, Rainer & Thiele, Rainer, 2004. "From Washington to post-Washington? Consensus policies and divergent developments in Latin America and Asia," Kiel Discussion Papers 408, Kiel Institute for the World Economy (IfW Kiel).

    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:wbk:wbrwps:2419. 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: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.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.