PRIVATE SAVING IN INDIA AND MALAYSIA COMPARED: THE ROLE OF FINANCIAL LIBERALIZATION AND EXPECTED PENSION BENEFITS

James B. Ang () and Kunal Sen

No 13/08, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: In this paper, we provide a comparative account of the evolution of private saving in India and Malaysia, and analyze how policy changes in the financial sectors and pension systems help explain differences in their saving performance. Using the ARDL bounds estimation procedure, we find a fairly robust long-run relationship between private saving and its determinants in both countries. Consistent with the predictions made in the life cycle model, our results indicate that higher income growth stimulates private saving and an increase in age dependency retards private saving. The results provide some support for the hypothesis that financial liberalization results in lower private saving in both countries. The evidence also indicates that expected pension benefits tend to stimulate private saving in India, but that the reverse is found in Malaysia.

Keywords: private savings; pension saving; financial liberalization; India; Malaysia. (search for similar items in EconPapers)
JEL-codes: C22 O16 O53 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cwa, nep-dev, nep-mac and nep-sea
Date: Written
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Related works:
Working Paper: Private Saving in India and Malaysia Compared: The Role of Financial Liberalization and Expected Pension Benefits (2009)
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