The impact of national savings on economic growth in Rwanda

Abstract

The general objective of this research is to examine the impact of national savings on economic growth of Rwanda. The findings reveals that in long run, R -squarred which is a statistical measure of how close the data are to the fitted regression line; it can also be defined as the percentage of the response variable variation that is explained by a linear model has a value of 0.962498 which shows that control variables; National Savings, Gross Capital Formation and Exports of goods and services explain GDP at 96.24% level of significant as R2=0.962498. This also indicates that when National Savings, Gross Capital Formation and Exports of goods and services rise by one percent the Gross Domestic Product increases increase by 0.962498, while error terms are held constant In the short run of this research R2 = 0.857078 which means that the GDP is explained by National Savings, Gross Capital Formation and Exports of goods and services at 85.70% level of significance. An increase of 1% in independent variables; National Savings, Gross Capital Formation and Exports of goods and services induce an increase of 0.857078 in Gross Domestic Product if other things remain constant( error terms). These results let the researcher conclude that National Savings, Gross Capital Formation, Exports of goods and services and the Gross Domestic Products have been moving in an increasing but with stable economic way during the period of twenty years from 1995 up to 2014. Therefore, the research results are broadly in line with earlier findings in the literature, more work was done to investigate the extent at which the estimates/findings are strong to alternative measures of the deep characteristics of Rwandan economy.