SELECTED MACROECONOMIC DETERMINANTS OF SAVINGS:
EMPIRICAL EVIDENCE FROM NIGERIA (1991 to 2014)
Atseye, Fidelis Anake
; Nedozi, Fidelis O.
; Obasam, Jude O.
Volume - 2 Issue - 12, Pages - 5528-5551
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.]
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