Private Savings in Eastern European EU-Accession Countries: Evidence from a Dynamic Panel Data Model

Mechthild Schrooten and Sabine Stephan

No 372, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: After the collapse in early transition years, saving rates in Eastern European EUaccession countries have recovered strongly. Is private saving in these countries now driven by the same forces as in the EU? A GMM estimator is applied to analyze the determinants of private saving in both country groups. Main results are: saving rates are persistent; income growth increases saving, whereas public saving crowds out private saving. Domestic saving and foreign capital operate as substitutes. Long-run effects of income growth and public saving are larger in the EU than in the candidate countries, indicating that saving behavior in the EU is determined to a larger extent by long-run perspectives than in the candidate countries.

Keywords: Dynamic panel data model; private savings; Eastern European EU-accession countries; GMM estimator (search for similar items in EconPapers)
JEL-codes: C33 E21 (search for similar items in EconPapers)
Pages: 36 p.
Date: 2003
New Economics Papers: this item is included in nep-eec, nep-mac and nep-tra
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Citations: View citations in EconPapers (5)

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