The Savings Collapse during the Transition in Eastern Europe

The authors assess the presence and extent of involuntary savings by comparing the predicted savings rates of market economies with those of the pre-transition economies. On balance, predicted savings rates fell short of actual savings rates, especially for the former Soviet Union and the Baltics --...

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Main Authors:	Denizer, Cevdet, Wolf, Holger C.
Format:	Publications & Research
Language:	en_US
Published:	World Bank, Washington, DC 2015
Subjects:	savings market economy transitional economies economic liberalization gross domestic product centrally planned economies centrally planned economy comparative economics conflict consumers consumption smoothing CPI development economics disequilibrium econometrics economic circumstances economic growth economic outlook economic performance economic reform elasticities elasticity equilibrium financial deepening GDP GDP per capita growth policy income income distribution income support inequality inflation interest rates liberalization M2 market economies poor positive effects poverty reduction price changes price controls real income savings behavior savings rates social security sustainable growth terms of trade transition economies urbanization war wealth willingness to pay
Online Access:	http://hdl.handle.net/10986/21375

id	okr-10986-21375
recordtype	oai_dc
spelling	okr-10986-213752021-04-23T14:04:01Z The Savings Collapse during the Transition in Eastern Europe Denizer, Cevdet Wolf, Holger C. savings market economy transitional economies economic liberalization gross domestic product centrally planned economies centrally planned economy comparative economics conflict consumers consumption smoothing CPI development economics disequilibrium econometrics economic circumstances economic growth economic outlook economic performance economic reform elasticities elasticity equilibrium financial deepening GDP GDP per capita growth policy income income distribution income support inequality inflation interest rates liberalization M2 market economies poor positive effects poverty reduction price changes price controls real income savings savings behavior savings rates social security sustainable growth terms of trade transition economies urbanization war wealth willingness to pay The authors assess the presence and extent of involuntary savings by comparing the predicted savings rates of market economies with those of the pre-transition economies. On balance, predicted savings rates fell short of actual savings rates, especially for the former Soviet Union and the Baltics -- providing some support for the notion of excessive pre-transition savings. Comparing the savings behavior of market economies and transition economies, they found substantial similarities, except for a negative link between savings and GDP growth. As the fastest-growing transition economies are at the bottom of the adjustment J-curve, the finding is consistent with consumption smoothing. Finally, they explored whether differences in the extent of economic liberalization affected savings rates in the cross-section of transition economies. They found that liberalization is associated with lower savings, with a one-year lag. To the extent that liberalization is perceived as an indicator of likely future growth, this behavior is consistent with smoothing in the face of a J-curve change in output. 2015-02-02T21:02:21Z 2015-02-02T21:02:21Z 2000-08 http://hdl.handle.net/10986/21375 en_US Policy Research Working Paper;No. 2421 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Europe and Central Asia Europe Central Asia Eastern Europe Russian Federation
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	savings market economy transitional economies economic liberalization gross domestic product centrally planned economies centrally planned economy comparative economics conflict consumers consumption smoothing CPI development economics disequilibrium econometrics economic circumstances economic growth economic outlook economic performance economic reform elasticities elasticity equilibrium financial deepening GDP GDP per capita growth policy income income distribution income support inequality inflation interest rates liberalization M2 market economies poor positive effects poverty reduction price changes price controls real income savings savings behavior savings rates social security sustainable growth terms of trade transition economies urbanization war wealth willingness to pay
spellingShingle	savings market economy transitional economies economic liberalization gross domestic product centrally planned economies centrally planned economy comparative economics conflict consumers consumption smoothing CPI development economics disequilibrium econometrics economic circumstances economic growth economic outlook economic performance economic reform elasticities elasticity equilibrium financial deepening GDP GDP per capita growth policy income income distribution income support inequality inflation interest rates liberalization M2 market economies poor positive effects poverty reduction price changes price controls real income savings savings behavior savings rates social security sustainable growth terms of trade transition economies urbanization war wealth willingness to pay Denizer, Cevdet Wolf, Holger C. The Savings Collapse during the Transition in Eastern Europe
geographic_facet	Europe and Central Asia Europe Central Asia Eastern Europe Russian Federation
relation	Policy Research Working Paper;No. 2421
description	The authors assess the presence and extent of involuntary savings by comparing the predicted savings rates of market economies with those of the pre-transition economies. On balance, predicted savings rates fell short of actual savings rates, especially for the former Soviet Union and the Baltics -- providing some support for the notion of excessive pre-transition savings. Comparing the savings behavior of market economies and transition economies, they found substantial similarities, except for a negative link between savings and GDP growth. As the fastest-growing transition economies are at the bottom of the adjustment J-curve, the finding is consistent with consumption smoothing. Finally, they explored whether differences in the extent of economic liberalization affected savings rates in the cross-section of transition economies. They found that liberalization is associated with lower savings, with a one-year lag. To the extent that liberalization is perceived as an indicator of likely future growth, this behavior is consistent with smoothing in the face of a J-curve change in output.
format	Publications & Research
author	Denizer, Cevdet Wolf, Holger C.
author_facet	Denizer, Cevdet Wolf, Holger C.
author_sort	Denizer, Cevdet
title	The Savings Collapse during the Transition in Eastern Europe
title_short	The Savings Collapse during the Transition in Eastern Europe
title_full	The Savings Collapse during the Transition in Eastern Europe
title_fullStr	The Savings Collapse during the Transition in Eastern Europe
title_full_unstemmed	The Savings Collapse during the Transition in Eastern Europe
title_sort	savings collapse during the transition in eastern europe
publisher	World Bank, Washington, DC
publishDate	2015
url	http://hdl.handle.net/10986/21375
_version_	1764448080040558592

The Savings Collapse during the Transition in Eastern Europe

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