Determinants of private savings behaviour in Turkey

Abstract

This study investigates the effects on private saving rates of a number of policy and non-policy variables. The analysis covers the period 1968-1994. The empirical private saving model for Turkey is estimated. The findings support the hypothesis that private saving rates have strong inertia. The evidence indicates that government saving does not tend to crowd out private savings and the Ricardian equivalence does not hold strictly. Income level has a positive impact on private saving rate, and growth rate of income is not statistically significant. From a policy point of view, financial depth and development measures in Turkey suggest that countries with deeper financial systems tend to have higher private saving rates. Private credit and real interest rates try to capture the severity of the borrowing constraints and the degree of financial repression for Turkey. Moreover, the negative impact of life expectancy rate lends support to the life-cycle hypothesis. The precautionary motive for saving is supported by the findings that inflation captures the degree of macroeconomic volatility and has a positive impact on private saving in Turkey.

The importance of government incentives for housing savings in Croatia

“…Several scholarly papers confirm the persistency of private savings rates, i.e. the fact that they are strongly autocorrelated (Dumičić & Čibarić, 2010;Loayza et al, 2000;Ozcan et al, 2003;Schrooten & Stephan, 2005). Therefore, the lagged values of private savings can explain the savings rate in a given year.…”

“…The effect of political instability is positive as well. Moreover, terms of trade and current account deficit also proved to be important determinants of private savings (De Serres & Pelgrin, 2003;Jongwanich, 2010;Masson, Bayoumi, & Samiei, 1998;Ozcan, Gunay, & Ertac, 2003;Schrooten & Stephan, 2005). Positive terms of trade shocks boost savings through a positive impact on wealth and income.…”

Factors Influencing Savings Rate in Malaysia

“…The link between interest rates and savings is not clear because many factors affect savings rates. Boskin (1978), Giovannini (1983), Mackinnon (1991), Ozcan and Ozcan (2000) agreed that the interest rate elasticity of savings is weak. In view of increasing of household debts in Malaysia, it is becoming increasingly difficult to ignore the important interest rates in attracting savings.…”

Determinants of Private Saving Level: Evidence from Turkey

“…Moreover, most of cross-section analyses regarding saving behavior suffer from inaccuracies in and even lack of data (Ozcan & Gunay & Ertac, 2003) and as the number of countries increase in the cross-section analyses this problem multiplies and can give way for incorrect findings. While specific country analysis can suffer from these problems as well; analyses of single countries, which have relatively healthier data sets that spanning relatively longer time periods, can provide more robust understanding of saving behavior.…”