Open AccessFINANCIAL SECTOR STABILITY AND GROSS DOMESTIC SAVINGS IN GHANA
Author(s) -
Ibrahim Nandom Yakubu,
Seydou Oumarou,
Iliasu Abdallah
Publication year - 2022
Publication title -
international journal of industrial management
Language(s) - English
Resource type - Journals
eISSN - 0127-564X
pISSN - 2289-9286
DOI - 10.15282/ijim.13.1.2022.7265
Subject(s) - broad money , economics , ordinary least squares , inflation (cosmology) , financial stability , financial sector , gross domestic product , real gross domestic product , financial sector development , finance , monetary economics , macroeconomics , monetary policy , financial system , econometrics , physics , theoretical physics
Domestic savings are the primary source of financing for domestic investments, hence, they play an essential role in a country's economic growth. Therefore, understanding the determinants of domestic savings is critical for policy formulation.This study investigates the impact of financial sector stability on gross domestic savings in Ghana over the period 1970-2017. Applying the Fully Modified Ordinary Least Squares (FMOLS) technique, the findings show that financial sector stability exerts a positive significant effect on gross domestic savings. Broad money supply also influences savings positively although the effect is insignificant. Also, while inflation positively and significantly impacts savings, economic growth reduces domestic savings in Ghana. The study presents some policy implications.