An Examination of the Nexus Between Private Savings and Economic Development

Abstract

The study aims to investigate the private savings and economic development nexus in Nigeria. The methodology is based on econometric analysis to estimate parameter values and analyze economic relationships with co-integration and Granger causality tests employed to examine the variables employed. The variables employed in the study have long term positive relationship following the results from the Johansen co-integration, private savings and economic development have bilateral causality which is significant using the Granger causality tests. The results suggest that economic development Granger-causes private savings and private savings Granger-cause economic development. Following the study results, in the long run economic development can stimulate private savings and private savings can accelerate economic development. Government and policymakers in Nigeria should implement policies to attract more private savings, thereby accelerating economic development and growth, GDP per capita increase, and the living standard of citizens in the country improved.