Hellenic Open University Conferences, International Conference on Business & Economics of the Hellenic Open University 2016

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The determinants of household deposits: Evidence from four South European countries
Fotini Economou, Christos Triantopoulos

##manager.scheduler.building##: Titania
##manager.scheduler.room##: Solon
Date: 2016-04-23 11:00 AM – 01:00 PM
Last modified: 2016-05-25

Abstract


This paper examines the household deposits determinants in four South European countries, namely Greece, Italy, Portugal and Spain from 2003 to 2014. These economies have experienced severe macroeconomic imbalances and offer an interesting setting for analysis. Moreover, we provide, for the first time in the literature, an empirical investigation of the impact of the sovereign debt crisis on household deposits. Apart from traditional deposits determinants (i.e. inflation, interest rates etc.), we also test for the impact of alternative factors such as economic sentiment and consumer confidence. Along with a panel data analysis, we also examine the country specific results for the four countries under examination to account for their differences in household saving behavior. Moreover, we test for different sub-periods that have been endogenously identified, since household saving behavior may have different determinants under different economic and financial conditions. Our findings confirm this hypothesis. The empirical results provide useful insight for policy makers, clearly stating the impact of sentiment indicators, especially during periods of crisis. It is crucial to restore trust and confidence in the financial system in order to safeguard financial stability and prevent liquidity crises.


Keywords


household deposits; panel data analysis, debt crisis, economic sentiment

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