National Savings Rates of India and Pakistan: A Macroeconometric Analysis (Saving Behaviour) (Report‪)‬

Savings provide the most important economic link between the past, present and future of a country. An adequate rate of national saving is regarded as an essential condition for achieving targets in the investment and growth rates. For these reasons, the literature relating to savings and consumption with particular emphasis on their determinants--demographic, monetary, fiscal etc., has shown a phenomenal growth during the last half century. An up-to-date and comprehensive review of theoretical and empirical literature on savings made in Kazmi (1991) led to the conclusion that while literature on the determinants of savings (private, corporate and public) had proliferated over time, there was little work on the 'quantification of factors' causing a differential in the savings rates of two particular countries. This paper makes an attempt to fill this gap by adopting a simple but innovative methodology which has been used for analysing the national savings rates of India and Pakistan and constitutes the following steps: