Understanding the nexus between savings and economic growth

A South African context

Bibliographic Data

ID21540945
AuthorsBianca Flavia van Wyk (Development Finance, University of Stellenbosch Business School, Cape Town, South Africa, corresponding author), Forget Mingiri Kapingura (0000-0002-5808-5612, University of Fort Hare)
Year2021
Volume38
Issue5
Pages828-844
Publication date2021-09-03
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueDevelopment Southern Africa (JOURNAL)
Journal identifiersISSN: 0376-835X • E-ISSN: 1470-3637
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/0376835x.2021.1932424
OpenAlexW3172335412
LanguageEN
Citations received1
References cited25

The study examines the relationship between savings and economic growth in South Africa for the period 1986–2018. The Johansen cointegration technique and the Vector Error Correction Model were employed as methods of analysis. The findings from the study indicate that the effect of savings on economic growth in South Africa is negative . However, a positive relationship between the two variables was established in the short-run. Granger causality tests were also utilised to determine the direction of causality between savings and economic growth. The results revealed that the relationship runs from economic growth to gross domestic savings. Another important observation from the study is the role of investment which was found to have a positive effect on economic growth. This result also supports the idea of promoting investment if the country is to achieve sustainable economic growth

Cointegration · Development economics · Econometrics · Economics · Error correction model · Geography · Granger causality · Johansen test · Macroeconomics · Monetary economics · Real gross domestic product · Short run · Sustainable Growth Rate · Financial Literacy, Pension, Retirement Analysis · Fiscal Policy and Economic Growth · Islamic Finance and Banking Studies · Finance

Tools

Open DOI