SAVINGS BEHAVIOUR IN MUSLIM AND NON-MUSLIM COUNTRIES IN CONTEXT TO THE INTEREST RATE

Naeem Akram () and Ifran Akram

Pakistan Journal of Applied Economics, 2015, vol. 25, issue 2, 161-177

Abstract: Due to close relationship of savings with economic growth and other development indicators, analysis of savings behaviour has become very important. The present study has analysed the savings behaviour of four countries (Pakistan, Bangladesh, Malaysia and Indonesia) with majority population of Muslims and four countries (India, Sri Lanka, Thailand and the Philippines) with majority population of Non-Muslims, for the period 1975 to 2012. The Panel technique in the context of interest rate role in determining savings has been used. It was found that impact of real interest rate on savings in first four countries is insignificant; whereas, in the latter four countries, the impact is positive and significant. Further, the study also found that age dependency, foreign savings and inflation have a negative, while per capita GDP, financial sector development and openness exhibit a positive and significant impact on savings in both categories of these countries. However, urbanization has different relationships in the two types of countries.

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Date: 2015
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