Savings and Investment: Some International Perspectives

Martin Schmidt

Southern Economic Journal, 2001, vol. 68, issue 2, 446-456

Abstract: Consistent with neoclassical growth models, recent estimates of the close association between domestic saving and investment rates may allow policy makers the opportunity to alter investment through the introduction of polices that alter domestic savings. However, such an interpretation presumes an endogenous investment response. Equally likely, at least theoretically, is that the close association is maintained by movements in domestic savings. The present paper explicitly examines the endogeneity of domestic saving and investment rates. For a subset of countries, including the United States, the results suggest that saving adjustments make up only a small portion of investment behavior.

Date: 2001
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https://doi.org/10.1002/j.2325-8012.2001.tb00429.x

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Persistent link: https://EconPapers.repec.org/RePEc:wly:soecon:v:68:y:2001:i:2:p:446-456

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