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Article: Does financial market development stimulate savings? Evidence from emerging stock markets
- Article from:
- Contemporary Economic Policy
- Article date:
- July 1, 1999
- Author:
CopyrightCopyright Western Economic Association Jul 1999. Provided by ProQuest LLC. (Hide copyright information)
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This paper examines the empirical relation between financial market development, as measured by the stock market, and gross private savings rates in 16 emerging markets over 1982-1993. With data from all 16 countries, there is evidence of a significant positive relation between savings and stock market size and liquidity. When countries with outlying values for the stock market measures are excluded, however, all significance disappears. The results suggest that a growing or deepening stock market will not necessarily be associated with higher savings rates. (JEL E21, 016)
INTRODUCTION
More generally, the creation of new saving instruments and financial market development in a stable ...