Testing the Saving Functions of Keynes and Maizels

This article examines two competing saving functions. The Keynesian theory views the saving function as related to GDP. The "Maizels hypothesis" relates domestic saving to the export component of GDP. Since the economies of central Europe are exhibiting growing trade ties with the European Union, it is conceivable that this may boost domestic savings, thereby enhancing economic growth. This article tests these two hypotheses by using quarterly data for Slovakia over the period 1993-2001. Standard ordinary least-squares and the Johansen cointegration technique are used. The results are consistent with the Maizels hypothesis.