Determinants of domestic saving rate in Turkey: A new generation econometric analysis

Abstract

In this study, the determinants of domestic savings rate in Turkey are investigated by Johansen cointegration test and DOLS method for 1975-2018 periods. At the end of the analysis, the most important determinants of savings are found to be per capita income, real interest rates, inflation, employment and economic risk perception (gold prices). Error correction mechanisms of the models operate. The causality relationships between the variables are examined by Breitung and Candelon (2006) frequency domain causality test. While no causal relationship from real interests and gold prices to savings is determined, permanent causality from national income and employment to savings and temporary causality from inflation to savings are found.

Keywords

• domestic saving rates
• determinants of saving
• frequency domain causality test