Behavior and Determinants of Public Savings in Commercial Banks in Indonesia: A Dynamic Model Approach

Tri Oldy Rotinsulu; Paulus Kindangen; Hanly Fendy DJohar Siwu

doi:10.61255/jeemba.v4i4.1159

Authors

Tri Oldy Rotinsulu Universitas Sam Ratulangi, Indonesia
Paulus Kindangen Universitas Sam Ratulangi, Indonesia
Hanly Fendy DJohar Siwu Universitas Sam Ratulangi, Indonesia

DOI:

https://doi.org/10.61255/jeemba.v4i4.1159

Keywords:

Public Savings, Error Correction Model, Macroeconomic Determinants, Demographic Shifts, Monetary Policy

Abstract

Purpose – This study evaluated the impact of macroeconomic determinants (Bank Indonesia policy interest rate, commercial bank deposit rate, national inflation rate) and demographic shifts (productive-age population) on public savings within Indonesian commercial banks. To resolve frequency discrepancies between annual demographic and quarterly macroeconomic data, a static temporal disaggregation procedure was applied.

Design/methodology/approach – The empirical analysis utilized a quantitative time-series dataset spanning an eight-year observation period from 2016 to 2023. A dynamic Error Correction Model (ECM) accommodated short-term behavioral responses while simultaneously capturing long-term structural equilibrium adjustments.

Finding/Results – The estimation established that policy and deposit interest rates yielded statistically insignificant impacts on public savings across both temporal horizons. In contrast, the national inflation rate exerted a negative and significant influence on deposit volumes. Furthermore, a larger working-age population exhibited a positive and significant effect on long-term capital accumulation. The dynamic framework confirmed a negative Error Correction Term, proving that savings behavior requires a transitional phase to correct temporal deviations following macroeconomic shocks.

Originality/Value – Policymakers must transition from isolated monetary rate manipulations toward integrated macroeconomic and demographic strategies. Synchronizing inflation control mechanisms with long-term demographic planning provides a robust foundation for institutional funding, demonstrating that structural economic stability dictates saving capacities more decisively than traditional yield incentives.

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