Global Journal of Human Social Science, E: Economics, Volume 21 Issue 4

Table 6 shows the result summary of the Breusch-Pagan-Godfrey test. From the table, we cansee that obs* r-squared p-value is 0.6398, which is greater than 0.05, so we can reject the alternative hypothesis and accept the null hypothesis. That is, there is no heteroskedasticity in thismodel. VI. C onclusion In this paper, I focused on whether the recent lower deposit interest rate will create any monetary uncertainty by discouraging people to save in Bangladesh. In this study, I used deposit interest rate, inflation rate, remittance, and GDP as explanatory variables. I used time-series data from the period of 1976 to 2019. In my current study, I employed the ARDL approach to investigate the long-run and short-run impact of selected variables on gross savings. The stationarity of all variables was check and we found that some variables were integrated at the first difference, and some were at the level. The Akaike information criterion was applied to get the optimal model, and the suggested optimal model was 4,2,3,4,4. The results of the study revealed in the short-run lower interest rate increase gross saving that indicates that people save their money for the precautionary purpose not for interest or profit but in the long-run relationship between deposit interest rate and gross saving is positive but insignificant that is higher interest lead to higher gross savings and lower interest rate lower the saving. In the long-run and short-run inflation and GDP have a positive influence on gross savings. Result also displayed that in the long-run previous year remittance discourage the current year savings, and in the short run it encourages savingbehavior in Bangladesh. From this investigation, it can be said that in the long period, lower deposit interest rate may negatively effect capital formation by reducing savings. R eferences R éférences R eferencias 1. A.Joshua, C. Yin-Wong, I. Hiro “The Interest Rate Effect on Private Saving: Alternative Perspectives” journal of International Commerce, Economics and Policy, vol.10. 2019. 2. Abu, N. (2010), Savings and Economic Growth Nexus in Nigeria: Granger Causality and Co- integration Analysis. Review of Economic and Business Studies, 3(1): 93-104. 3. Agrawal, P., P. Sahoo and R. k. Dash. 2007. Saving Behavior in South Asia. University of Delhi Enclave, Working Paper Series no. E/289/2008. 4. Agarwal, P. (2000). Saving, Investment and Growth in South Asia. Indra Gandhi Institute of Development Research, 1-47. 5. Ang, J. (2009). Household Saving Behaviour in an Extended Life Cycle Model: A Comparative Study of China and India. Journal of Development Studies, 45(8), 1344-1359. 6. B. P. Paul, M. G. S. Uddin, and A. M. Noman, “Remittances and output in Bangladesh: an ARDL bounds testing approach to cointegration,” International Review of Economics , vol. 58, no. 2, pp. 229–242, 2011. 7. Case, Fair, and Oster (2012). Principle of Economics, Tenth edition, Prentice Hall. 8. Chow, G. C. (1993). Capital formation and Economic growth in China. the quarterly journal of Economics, volume 108, 9. Christopher D. Carroll (1997) ‘Buffer-Stock Saving and the Life Cycle/Permanent Income Hypothesis’ The Quarterly Journal of Economics, pp. 1-55 (55 pages), Oxford UniversityPress. 10. Emeka N., Kelvin U. (2016), ‘Autoregressive Distributed Lag (ARDL) cointegration technique: application and interpretation’. Journal of Statistical and Econometric Methods, vol.5, no.4, 2016, 63-91 ISSN: 1792-6602 (print), 1792-6939 (online) Scienpress Ltd, 2016 11. Faridi, M.Z., Rehman, H. and Bashir, F. (2010). Household Saving Behaviour in Pakistan: A Case of Multan District. Pakistan Journal of Social Science (PJSS), 30(1), 17-29. 12. Horioka, C. Y. (2009). The (DIS) Saving Behavior of the Aged in Japan. National Bureau of Economic Research, Working Paper No. 15601. 13. Husain, A. M. (1995). Long-run Determinants of Private Saving Behaviour in Pakistan. The Pakistan Development Review, 34(4), 1057-1066. 14. J. Bentzen and T. Engsted, “A revival of the autoregressive distributed lag model in estimating energy demand relationships,” Energy , vol. 26, no. 1, pp. 45–55, 2001. View at: Publisher Site | Google Scholar 15. Joshua Aizenman,Yin-Wong Cheung, and Hiro Ito, 2017. THE INTEREST RATE EFFECT ON PRIVATE SAVING: ALTERNATIVE PERSPECTIVES’ ADBI Working Paper Series, Asian Development Bank Institute. 16. Keynes, J. M. (1936). The General Theory of Employment Terest and Money. Macmillan and Company. 17. Kenrick, C.H. (2004). Remittances, Remittances Decay and Financial Deepening in Developing Countries. The American Economist, 48(2), 82-94. 18. Koskela and Viren (1985) find that for a group of industrial countries, inflation have a positive impact on savings. 19. Koskela, E. and M. Viren. 1985. Consumption Function, Labour Supply Rationing and Borrowing Constraints. Oxford Economic Paper. 20. L. norman and S. Rashmi , “Private Saving in India” The World Bank Economic Review , Volume 14, Issue 3, September 2000, Pages 571–594, 21. Modigliani, F., & Brumberg, R. (1954). Utility analysis and the consumption function: An Volume XXI Issue IV Version I 40 ( E ) Global Journal of Human Social Science - Year 2021 © 2021 Global Journals An Empirical Analysis of Interest Rate and Domestic Savings in Bangladesh