Russians’ Personal Savings in the Regional Context

Abstract

The purpose of this study is to find empirical evidence of long-run equilibrium relationship between the personal savings ratio and several factors that, in the author’s opinion, determine this ratio. To achieve this purpose, a panel for 82 regions of the Russian Federation for the years 2000–2022 was assembled on the basis of official statistics data. In the descriptive part of the paper, we examined theories of personal savings, saving behavior of the population, the impact of personal savings on economic growth and the reasons why regional authorities should improve the climate for personal savings and growth of the working-age population in their regions. We used the PMG method to estimate our empirical ARDL model and found that the personal savings ratio is mainly determined by the age composition of the regional population and regional inflation, while money income and household final consumption are robust control variables. There is a long-run equilibrium relationship between these variables.

Keywords

• personal savings
• economic growth
• cointegration
• regions
• russia