Foreign savings and Brazilian economic growth: an analysis of two disparate views

Kelly Cardoso Faro () and Cleomar Gomes Da Silva

Brazilian Journal of Political Economy, 2020, vol. 40, issue 1, 117-137

Abstract: The aim of this article is to analyzeempirically a dichotomy in the economic literature. The classical view claims that growth with foreign savings is feasible and viable, while a line of critical thinking advocates that foreign capital inflows affect domestic investments only in the short run, being irrelevant for long run growth. The bounds testing ARDL approach to cointegration is applied from 1999:4 to 2017:4. Estimation results show that foreign savings does not appear to explain the Brazilian economic growth in the long run, which is more in line with the understanding of the critical view. JEL Classification: E63; F21; F32; F43.

Keywords: Foreign savings; economic growth; ARDL; cointegration (search for similar items in EconPapers)
Date: 2020
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