The finance-investment-savings-funding circuit in open economias

Marco Flávio Resende

Brazilian Journal of Political Economy, 2008, vol. 28, issue 1, 136-154

Abstract: On monetary economies the Finance-Investment-Savings-Funding circuit (F-I-S-F) prevails. Investment precedes savings. This circuit was worked out for a closed economy. This study seeks to demonstrate that the circuit F-I-S-F also prevails for open economies. A second point studied in this paper relates the relationship between budget deficits and savings restriction for investment. Conclusions highlight that the circuit F-I-S-F prevails for open economies and that budget deficits do not cause savings restriction for investment. In some situations budget déficits transfer the effects of investment for national savings formation from domestic economy to the rest of the world. JEL Classification: E12, E21, E62, F41.

Keywords: Finance-Investment-Savings-Funding; open economy; national saving (search for similar items in EconPapers)
Date: 2008
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