Determinants of private savings: An investigation on selected MENA countries

Investment, which is critical for economic growth, is usually financed by domestic and foreign savings. However, by appreciating a country's currency, which causes current account deficit and increasing economic vulnerability, foreign savings have some negative effects on economy. Because of this reason domestic savings constitute the most reliable source of finance for investments. Private savings contains a significant part of the domestic savings. Accordingly, private savings and its critical role in economic growth require a proper understanding of the private saving behavior. The purpose of this thesis is to analyze the determinants of private savings in the selected Middle East and North Africa (MENA) region. To this end, Panel ARDL (PMG-Pooled Mean Group) method has been applied to the annual data (1997-2016) for the selected six MENA countries, namely Algeria, Egypt, Israel, Jordan, Morocco and Turkey. According to the results, the impact of GDP per capita growth on private savings is positive; the impact of real interest rates, foreign savings and unemployment rate is negative. Keywords: Determinants of Private Savings, MENA Countries, Panel ARDL (PMG)