The Determinants of Private Savings in the EU: The Case of the Group of Eight New Entrant Countries.
|Author:||Mgr. Cornelius Amponsah|
|Year:||2010 - summer|
|Leaders:|| doc. Mgr. Tomáš Holub Ph.D.
|Work type:|| Masters
Specialization - IMESS
|Awards and prizes:|
|Abstract:||Private saving in the CEE countries can be described as having stabilised over the period of
reform. Among the transition variables employed in the study, price liberalisation stands out
as the most potent correlate of private saving. This is seen as a direct consequence the gradual
removal of the soft budget constraint under the command system and by extension the
elimination of involuntary saving. Another remarkable outcome from the GMM model is the
positive response of the first lag of private saving which demonstrates persistence of savings
in the CEE over the transition period. Tied to this is the strong response of private saving to
sound macroeconomic discipline in the CEE countries. This is evidenced in the positive
response to key variables like GDP growth and improvements in the terms of trade. Most
importantly, the aged dependency ratio is seen as the most consistently strong influence on
private saving. This brings to the fore the role of pension reforms in these countries and its
impact on public and private funds.