Determinants of Gross Domestic Saving in Ethiopia a Time...

Determinants of Gross Domestic Saving in Ethiopia: a time series analysis Kidane Badeg Contact: Kidane Badeg MoFED P.o.Box 1905, Addis Ababa , Ethiopia Email: kbadeg@mofed.gov.et Abstract The study conduct a time series analysis of the determinants of gross domestic saving in Ethiopia using co-integration and error correction econometric modeling(ECM), and employed data for the period of 1971-2009 collected from National bank of Ethiopia (NBE), MOFED, CSA and world bank on annual base. The study revealed that GPCI, DR, INF, GTR and GGDS1-t significant influence on GDS in cointegration model. Further more GPC, INF, GTR and GGDS1-t are also significant in ECM model while PCI, RIR and GM2 showed insignificant coefficient in both†¦show more content†¦This is, therefore, that Keynes (1936) said saving become to be seen as potentially disruptive to the economy and harmful to social warfare as it reduce one component of demand, consumption, with out increase investment and it may cause inadequate demand and hence out put and employment lower than the capacity of the economy. This failure may attribute to variety of reasons including wage rigidity, liquidity prefer ence and fixed capital coefficient in production (Modigliani 1986). Despite the importance of saving for economic growth, saving rate is lower to finance the domestic investment in most developing countries. Sub Sahara Africa has low gross domestic saving (18% its GDP) when compare to South Asia, 26% and newly industrialized countries 43% in 2005 (IMF, 2007). For Ethiopia, during the imperial era, gross domestic saving as a percent of GDP was 11% on average. After the socialist state took power in 1974 there were expectations to wards the increment of saving by eliminating the luxury life style of the ruling classes. In actual fact the policy of imposing capital ceiling became a serious disincentive to saving class and further encouraged conspicuous consumption (Befekadu and Birhanu, 2000). Instead of increasing, what turned out during the Derg regime was the ratio of gross domestic saving (GDS) as percent of GDP has declined from 11% to 4% on average, while further show a very haphazard rate during the entire Derg regime from high of 7% inShow MoreR elatedFactors Affect Profitability26818 Words   |  108 PagesIndustry Amdemikael Abera A Thesis Submitted to The Department of Accounting and Finance Presented in Partial Fulfillment of the Requirements for the Degree of Master of Science (Accounting and Finance) Addis Ababa University Addis Ababa, Ethiopia June 2012 Addis Ababa University School of Graduate Studies This is to certify that the thesis prepared by Amdemikael Abera, entitled: Factors Affecting Profitability: an Empirical Study on Ethiopian Banking Industry and submitted in partialRead MoreThe Ethiopian Financial Sector Reform29124 Words   |  117 Pagescomments. My thanks also goes to Ato Kagnew Wolde, Ato Tegenu Hailu, Ato Atnafu G/Meskel and Staff of Commercial Bank of Ethiopia; without whose encouragement and support, this paper would have not been completed timely. I am also indebted to my family and friends for their enduring moral support to finalize this task. Thanks must also be extended to staff of National Bank of Ethiopia, public and private banks and Ministry of Finance and Economic Development, who provided data and information whichRead MoreFactors Affect Choice of Bank Services23387 Words   |  94 Pagesperiod. My heartfelt thanks also go to my friends G/yessus G/hiwot (Defo) and Bahre Gebru for their technical, material, and moral supports. For they have devoted unreserved efforts to comment and edit my work before it has sent to advisor, the research time was a lovely moment for me. G/medhin G/silassie and Berhe W/mariam also deserve thankfulness for participating in the survey study. 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