Economics at your fingertips  

Explaining Saving-Investment Correlations

Marianne Baxter () and Mario Crucini ()

American Economic Review, 1993, vol. 83, issue 3, 416-36

Abstract: National saving and investment rates are highly positively correlated in virtually all countries. This is puzzling, as it apparently implies a low degree of international capital mobility. This paper shows that the observed positive correlation between national saving and investment rates arises naturally within a quantitatively restricted equilibrium model with perfect mobility of financial and physical capital. The model is consistent with the fact that saving-investment correlations are larger for larger countries but are still substantial for small countries. Further, the model is consistent with the finding that current-account deficits tend to be associated with investment booms. Copyright 1993 by American Economic Association.

Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (241) Track citations by RSS feed

Downloads: (external link) ... O%3B2-6&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

Page updated 2019-08-20
Handle: RePEc:aea:aecrev:v:83:y:1993:i:3:p:416-36