Title:
SELECTED MACROECONOMIC DETERMINANTS OF SAVINGS: EMPIRICAL EVIDENCE FROM NIGERIA (1991 to 2014)

Authors:
Atseye, Fidelis Anake ; Nedozi, Fidelis O. ; Obasam, Jude O.

Volume - 2 Issue - 12, Pages - 5528-5551

Abstract:
Savings is presumed as 'deferred consumption', being income left over for future consumption on capital investments, precautionary and speculative motives. The decision to save is usually determined by both micro and macro economic factors. This study examined some macroeconomic determinants of savings for Nigeria using the Johansen cointegration and error correction methodology. Four hypotheses were formulated and tested. Data employed were collated from various sources such as the Central Bank of Nigeria statistical bulletins for the period,1991 to 2014. The unit root test was conducted for the series and the results showed that they were stationary at various levels. The estimated results revealed that inflation rate, financial deepening and deposit interest rate were not major determinants of savings during the study period. Only income was found to be a significant macroeconomic determinant of savings. Also, the coefficient of error correction mechanism (ECM) is negatively signed and significant at 0.05 per cent critical level. This showed that about 64 per cent disequilibria in Nigeria's savings in the previous year are corrected for in the current year. Consequent upon this, the study recommends that government and policy makers in Nigeria should encourage increase in the productive base of the economy in order to promote real income growth and marginal propensity to save.

Cite this Article:

[Anake, Atseye, Fidelis. "SELECTED MACROECONOMIC DETERMINANTS OF SAVINGS: EMPIRICAL EVIDENCE FROM NIGERIA (1991 to 2014)." International Journal of Social Science and Economic Research, vol. 2, no. 12, 2017, pp. 5528-5551. December.]