The Savings-Investment Relationship: Cointegration and Causality Evidence From Uemoa Countries

Esso, Jacques Loesse; Keho, Yaya

doi:10.5539/ijef.v2n1p174

Cited by 23 publications

(22 citation statements)

References 39 publications

(31 reference statements)

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“…(). It is true that empirical evidence exists for a positive correlation between the rate of saving and of investment (Baxter and Crucini, ), but when it comes to the direction of causality between them, the evidence is inconclusive (Attanasio et al ., ; Tsoukis and Alyousha, ; Sinha, ; Esso and Keho, ).…”

Section: The Macroeconomic Effects Of Formal Saving and Financial Devmentioning

confidence: 99%

Barriers to Formal Saving: Micro‐ and Macroeconomic Effects

Giannatale

Roa²

2018

Journal of Economic Surveys

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This paper examines different barriers to formal saving, considering various interventions and their possible effects at microeconomic and macroeconomic levels. It presents a comprehensive review of the literature, based on a detailed classification of the barriers associated with supplyside factors, related to access to financial products, and demand-side barriers, related to the use and frequency of use of those products. The paper concludes that this classification and analysis contributes to a fuller understanding of the question of financial inclusion, and how to achieve it.

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Section: The Macroeconomic Effects Of Formal Saving and Financial Devmentioning

confidence: 99%

Barriers to Formal Saving: Micro‐ and Macroeconomic Effects

Giannatale

Roa²

2018

Journal of Economic Surveys

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“…So, all theories regarding growth and development concludes that savings and investment can play a vital role in prop up and enhancing the economic growth in an economy. Esso and Yaya (2010) analyzed the panel data for the saving investment nexus in seven developing economies i.e. Benin, Burkina Faso, Côte d'Ivoire, Mali, Niger, Senegal and Togo West African Economic and Monetary Union (UEMOA).…”

Section: Review Of Literaturementioning

confidence: 99%

Analyzing the Savings-Investment Trend in a Panel of G-7 Countries

Mansoor

Sultana

Saeed

2018

Asian Journal of Economics and Empirical Research

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This study examined the relationship between savings and investment in the G-7 countries for the period of 1970 to 2015. The stationary analysis of the data has been done by adopting the panel Levin, Lin & Chu, Breitung, Pesaran & Shin, ADF-Fisher & PP-Fisher criteria while the long run relationship has been tested by employing the Pedroni residual test of co-integration. The results neglected the existence of a long run correlation between saving and investment in G-7 countries. Further, joint causality between the savings and investment has also been tested using the fixed effect VAR model. Wald test explains that the two consecutive lags i.e. S (-1) and S (-2) of savings is jointly causing savings in the current year in the G7 countries. While the same two lags of investment i.e. I (-1) and I (-2) does not jointly granger cause savings in the G7 economies. The results are in line with Feldstein and Horioka (1980) that there is a stable and significant association between the increasing rates of savings and investment in the short run while this relationship weaken in the long run.

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“…Unidirectional causality from growth to savings (Verma, 2007;Sahoo et al, 2001;Mühleisen, 1997, Sinha andSinha, 2007), there is no causality between GDP and savings (Sinha, 1996). Bi-directional causality between savings and investment (Onafowara et al, 2011), there is causality running from savings to investment (Esso andKeho, 2010, Tehranchian andBehravesh, 2011), there is causality from investment to savings (Onafowara et al, 2011), there is no causation between savings and investment (Esso andKeho, 2010, Ramakrishna andVenkateshwar, 2012). There is bidirectional long-run causality between export and GDP growth (Mehrara and Firouzjaee , 2011;Ekanayake,1999).…”

Section: Literature Reviewmentioning

confidence: 99%

VAR Analysis of Economic Growth, Domestic Investment, Foreign Direct Investment, Domestic Savings and Trade in Rwanda

Ocaya¹,

Kaberuka²,

Ruranga³

2014

GJEA

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This paper analyses real Gross Domestic Product (GDP), Domestic Investment (DI), Foreign Direct Investment (FDI), Domestic Savings (DS) and Trade (TR) in Rwanda for the period 1970 to 2011. GDP and DI have an upward trend and annual growth of real GDP was around 8% in average for all period. FDI and DS have remained below 2% of GDP each and trade balance of Rwanda is always negative. Augmented Dickey-Fuller (ADF) tests show that GDP, DI and FDI are not stationary at the level but the first differences are stationary. VAR (1) was identified as the appropriate model according to Akaike information criterion, Schwarz information criterion and Hannan-Quinn information criterion. Granger causality tests show that there is bi-directional causality between GDP and TR and TR and DI and unidirectional causality from GDP to DI, from DS to GDP, from DS to DI and from DS to TR. These findings show that GDP can be used to promote Domestic Investment and Trade. Domestic savings have significant effects on GDP, DI and TR. VAR was estimated and the forecasted values of GDP, DI and FDI in 2011 are respectively, 3,843.6233 million, 22.67% and 0.95% while their actual values in 2011 are 3891.9million, 22.7% and 1.66%. There is under-prediction for GDP, DI and FDI. The differences can be explained by the efforts of the Government of Rwanda to promote GDP, Domestic Investment and Foreign Direct Investment.

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The Savings-Investment Relationship: Cointegration and Causality Evidence From Uemoa Countries

Cited by 23 publications

References 39 publications

Barriers to Formal Saving: Micro‐ and Macroeconomic Effects

Barriers to Formal Saving: Micro‐ and Macroeconomic Effects

Analyzing the Savings-Investment Trend in a Panel of G-7 Countries

VAR Analysis of Economic Growth, Domestic Investment, Foreign Direct Investment, Domestic Savings and Trade in Rwanda

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