Domestic Saving, Credit Ratio, Money Supply Ratio, and Economic Growth in Germany

English

Abstract

This study's goal is to examine the effects of domestic saving, credit, and money supply on long- and short-term economic development in Germany throughout times of crisis and not-crisis, namely from 1990 to 2021. This study uses a research period from 1990 to 2021 using data from the European Central Bank (ECB) to investigate the causal relationship between the domestic saving, credit, and money supply on economic growth in Germany. This study uses a quantitative method using Error Correction Model (ECM) analysis. We found that Germany's economic development may be slowed by an increase in the percentage of money in circulation there. Short-term German economic development is supported by the country's variable bank credit ratio. On the other hand, over time, the German bank credit ratio actually slows down the country's economic expansion. German economic growth is influenced both short- and long-term by the domestic savings ratio variable.