The transition economies of Eastern Europe almost uniformly experienced a precipitous plunge in savings rates - from levels above 30 percent of GDP to levels about half that - early in the transition, before rebounding slightly. Did savings collapse because involuntary savings were eliminated...

Based on matching household surveys for three central European countries, Bulgaria, Hungary and Poland, we explore the determinants of household saving rates in transition economies. We find savings rates to increase strongly in relative income and to be significantly higher for households...