Abstract:

This paper attempts to ascertain the determinants of private saving level in Turkey. We implemented OLS estimations and constructed a VEC model in order to circumvent possible endogeneity bias. This research found that a) private and public saving rates are partly complementary to each other; b) higher inflation rates and lower levels of social security tend to increase private saving rate because of higher uncertainty; c) easing credit constraints tends to decrease private saving; d) favorable terms of trade promote private saving by increasing income; and e) current account balance influence private saving positively.

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