Macroeconomic Factors in the Dynamics of Corporate and Household Saving: Evidence from Central and Eastern Europe

This article uses panel data estimations on annual data from 10 Central and Eastern European countries to assess the effect of different macroeconomic variables on the dynamics of corporate and household saving. The analyses show that changes in the macroeconomic environment affect the saving rates in both sectors, but with marked differences across the two sectors. The differences are most pronounced for the output gap, the real interest rate, the inflation rate, and the current account balance. Some variables, including the unemployment rate and changes in the real exchange rate, are unimportant in both sectors. The different results for the two sectors underscore the importance of analyzing the factors driving the dynamics of corporate and household saving separately.