Savings Behaviour in Fiji: An Empirical Assessment Using the ARDL Approach to Cointegration

National savings play an important role in the economic development of many developing countries, especially if capital markets are weak. In this paper we investigate the determinants of national savings for Fiji. We use the recently developed autoregressive distributed lag modelling approach, shown to provide robust estimates in small samples, to model Fiji's savings behaviour. Our results indicate that the life cycle hypothesis helps explain Fiji's savings behaviour. The key finding is that economic growth has the biggest impact on savings rate, suggesting that savings will increase with an increase in economic growth.