Effect of Interest Rate Liberalisation on Domestic Savings in Nigeria

Journal of Advanced Research in Economics and Administrative Sciences

View Publication Info
 
 
Field Value
 
Title Effect of Interest Rate Liberalisation on Domestic Savings in Nigeria
 
Creator Dahunsi, Olusola
 
Subject Interest Rate Liberalization, Domestic Savings, Capital Formation.
 
Description Purpose: Empirical investigations into the interest rate effects on domestic savings have provided mixed results. Hence, this study examined the interest rate effects on domestic savings in line with the financial liberalization hypothesis since the period of structural adjustment program (SAP) in Nigeria.
Approach/Methodology/Design: Data on gross domestic savings, interest rate, gross capital formation, and rate of inflation from 1986 to 2018 were obtained and analyzed using the autoregressive distributed lag (ARDL) technique.
Findings: The results revealed that interest rate and gross domestic savings are co-integrated in the long-run. The study showed that while capital formation positively affects domestic savings, the interest rate affects domestic savings negatively since the economic reforms of 1986 in Nigeria.
Practical Implications: The results of the study are important for the Nigerian government to promote home-grown investments through domestic savings and capital formation. This will be made possible in the face of interest rate liberalization in which a higher interest rate serves as incentives for the household to save more thereby increasing domestic savings of the economy.
Originality/value: The study further revealed that the long-run relationship exists between domestic private investments and interest rates.
 
Publisher Baynoon Centre for Studies and Development
 
Date 2020-11-08
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://bcsdjournals.com/index.php/jareas/article/view/59
10.47631/jareas.v1i2.59
 
Source Journal of Advanced Research in Economics and Administrative Sciences; Vol. 1 No. 2 (2020): Journal of Advanced Research in Economics and Administrative Sciences; 123-133
2708-9320
 
Language eng
 
Relation https://bcsdjournals.com/index.php/jareas/article/view/59/59
 
Rights https://creativecommons.org/licenses/by/4.0
 

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