Causal Relationship Between Domestic Saving And Economic Grkasem Barsengaowth: Case Of Ethiopia.

Abstract

The study investigated Causal relationship between domestic saving and economic growth; Case of Ethiopia for the period 1975-2014.Therefore, the main objective of this paper is to find the direction of causality between domestic savings and economic growth in case of Ethiopia using different techniques. To achieve its objective the study use Secondary data. The paper applies Granger Causality and Co-integration techniques to examine the causal relationship between domestic saving and economic growth. The Johansen co-integration test result revealed that the variables are co-integrated and there exists long run relationship between economic growth and domestic saving. The Granger Causality test result on the other hand revealed unidirectional causality which runs from economic growth to domestic saving.