Abstract
This research investigates the determinants of national saving in Ethiopia over the period 1984-2014. The main objective of the study is to identify the major factors that determine national saving in Ethiopia. The ordinary least square estimation method is used to arrive at the results of the study. The result of the long run and short run models revealed that Real Gross Domestic product, investment, consumption and inflation have shown similar relationship in both models. Real Gross Demotic product is the only factor which affects national saving significantly and positively. Other factors, which positively affect national saving, are not much significant. Example, investment, consumption and inflation are factors which affects national saving both positively and in significantly in the end. DOI: 10.7176/JESD/11-21-04 Publication date: November 30 th 2020
Highlights
Background of the studyAn economic system must be able to produce capital if it is to satisfy the want and needs of its citizens
The behavior and contributing factor of such allocation decision are important to understand the mechanisms and interactions across aggregate consumption, saving, capital accumulation and growth processes, economic policies in most countries try to influence the level and growth of these variables so as to achieve growth and development for any a nation. The efficiency of such policies still depends on the nature and degree of influence and impact that various policies may have on macroeconomic variables (Mankiew, 2000)
Aggregate saving has three components, these are national saving, corporate saving followed by public savings (Kumarasinghe, 2007)
Summary
Background of the studyAn economic system must be able to produce capital if it is to satisfy the want and needs of its citizens. The behavior and contributing factor of such allocation decision are important to understand the mechanisms and interactions across aggregate consumption, saving, capital accumulation and growth processes, economic policies in most countries try to influence the level and growth of these variables so as to achieve growth and development for any a nation. The efficiency of such policies still depends on the nature and degree of influence and impact that various policies may have on macroeconomic variables (Mankiew, 2000)
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