Abstract:
The objective of this study is to test the impact of national savings on economic growth in Sri
Lanka using annual time series data during the period of 1957 to 2014. In order to attain this
objective, this study employed the following analytical techniques: the Augmented DickeyFuller unit root test, Johansen Juselius Cointegration, and Granger Casualty approaches. The
unit root test result indicates that the variables used in this study are stationary at their 1st
difference, I(1). The Johansen Juselius cointegration test result shows that there is a positive
long-run relationship between national savings and economic growth in Sri Lanka and
Granger Casualty test finds that there is unidirectional causality running from national savings
to economic growth in Sri Lanka.