Impact of Social and Macroeconomic Uncertainty on Private Savings in Pakistan
Savings are the basic sources of funds required for investments and economic growth in developing countries like Pakistan. Unfortunately, National Savings have been lower in Pakistan as compared to its neighboring Asian countries. As Private Savings make a dominant (more than 90 percent) portion of National Savings and can conveniently be considered as representative of national saving rates, therefore, the present study has been devised to examine the private agent saving behavior, in Pakistan. The study spans over a period from 1975 to 2015. So for, the existing literature on saving behavior has used traditional variables. But, the present study focuses on Macroeconomic and Social Uncertainty as it affects economies in developing countries including Pakistan, with income uncertainty, Agriculture income ,inflation volatility, and terms of trade uncertainty as proxies for macroeconomic uncertainty, whereas, crime as a proxy for social uncertainty. Due to small sample size Autoregressive distributive lag approach has been employed to obtain short-run and long-run results. The long-run results reveal negative association between the variables and saving behavior except for terms of trade uncertainty which shows positive relation with saving behavior. On the other hand, short run results reveal negative association between income uncertainty, inflation volatility, and crime, whereas positive association between agriculture income and terms of trade uncertainty with saving pattern. Supervisor:- Dr. Saud Ahmad Khan
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