۱٫ Introduction

۲٫ Literature Review

۳٫ Data Analysis and Empirical Results Data Analysis and Empirical Results

۴٫ Conclusion and Recommendations

References

In recent years, there have been many discussions about savings and growth especially for developing countries. The saving concept has an important and crucial place in all economies. Indeed, the importance of savings leads to the discussion of determinants of savings in the literature. Moreover, with an awareness of the determinants of savings, the government have to put effort for increasing savings with using policies and precautions on their institutions. In this point, raising the savings of a household, which is an important element of economic life, has gained an crucial role. However, it is clear that all factors which have impacts on it should be known to solve this issue. Narrowing into transition economies, which transited from a planned economic system to market economy, the structure of savings has changed from public funds to private savings. It is clear that saving habits cannot change or adapt in the short term, in fact this paper aims to put forward recommendations to policymakers in transition economies. In this paper, it has been investigated how demographic determinants are effective on saving ratios using panel data analysis between 1993 and 2013 on 20 transition economies. The chosen demographic and economic variables are dependency ratio (total, youth and old), GDP per capita growth, population density, urban population of percentage of total population, female participation of labour force, unemployment rate.

Introduction

Savings accumulation and economic impacts of individual savings behaviours are two of the most fundamental concepts in economics, as discussed throughout economic history. The schools shaping the economic thought have tried to add different interpretations of these concepts by drawing from different points. Classical economic thought states that savings, as the source in capital accumulation and in growth models, are among the reasons for either growth or the recession. In contrast, the neo-classical model focuses on investments in directly supporting the effect of the savings and the savings are still placed as the source of growth. In this context, the differential point of Keynesian economics from Classical school can be defined as the paradox of savings, which is defined such that an increase in individual savings has individual benefits whereas in contrast an increase in national savings can cause a leak in the economy. Contrary to Keynes, Nurkse (1966) evaluated the results of the lack of savings, which means the fate for poor countries is a lack of savings in the least developed countries creates a vicious circle of poverty. According to Nurkse, low income level causes inadequate savings; relatedly this brings low-investments, which then turns to failure of production, employment, income and savings (Nurkse, 1966). The studies based on individuals’ savings are placed in the literature under the consumption theories. One of the first studies on this subject belongs to Irving Fisher (1930). Fisher, in his study, revealed that savings identified with the resolution of the two-term intertemporal optimization problems for the consumer who lived two periods including present and future (Fisher, 1930). Fisher expressed current savings as giving up present consumption and current debt as an abandonment of future consumption.