Global Journal of Commerce & Management Perspective
Open Access

ISSN: 2319–7285

Abstract

The Effect of Interest Rate, Inflation Rate and Gdp on National Savings Rate

Dr. Mohamed Sayed Abou El-Seoud

The study aims at investigating the effect of Real Gross Domestic Product (GDP), interest rate, and inflation rate on national saving rate in kingdom of Bahrain over the last twenty years. The study adopts Augmented Dickey-Fuller unit root test and cointegration test to examine the long run relationship between the variables under study. The findings indicate that the Real GDP growth rate has positive effect on national saving in the short run and significant at 5% level in the long run. Nominal interest rate has positive and significant effect on national saving rate at 1%level on the short run; however, its effect in the long run appears to be positive but insignificant, while the inflation rate (as a measure of macroeconomic uncertainty) has positive and significant effect on national saving rate in both the short run and the long run.

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