Journal of International Business and Economics

Relationship between Savings and Economic Growth: The Case For Iran
Reza Najarzadeh, Michael Reed, Mona Tasan

Abstract
Achieving a high and stable economic growth rate is an important issue for every country since economic growth is crucial for economic development. Since savings is key to economic growth, this paper assesses the relationship between savings and total and non-oil economic growth for Iran. We also analyze the long-run causality among the above variables in Iran's economy. Annual data for the period 1972- 2010 is used with an Autoregressive Distributed Lag Model for the empirical results. The resultsof the study show that there is a positive and significant impact of savings on total and non-oil economic growth. Both types of economic growth are also found to have positive and significant effect on savings. In addition, the results show that there is a long-run causal relationship between savings and economic growth, and between saving and non-oil economic growth, and that these relations are two-way.

Full Text: PDF     DOI: 10.15640/jibe.v2n4a7