The Long-Run Relationship Between Saving And Investment: Stylized Fact Or Fiction?
John Barkoulas (),
Alpay Filiztekin () and
Robert Murphy ()
No 262, Boston College Working Papers in Economics from Boston College Department of Economics
The high correlation between domestic saving and investment rates in cross country regressions has been interpreted by some authors as evidence that world capital markets are not integrated. Our paper reexamines the long-run saving investment relationship across OECD countries using co integration methods. This approach enables us to provide evidence regarding this relationship at a desegregated level, that is, for each country separately. It also accounts for the non-stationary of the underlying time series. In order to estimate long-run saving-investment correlation as well as to correct for simultaneous equation bias, for a non-linear single-equation error correlation model is used. The results qualify the conclusions of the previous studies by suggesting that saving and investment rates are not highly correlated in the long run for most OECD countries.
References: Add references at CitEc
Citations: Track citations by RSS feed
Published as "Time Series Evidence on the Saving-Investment Relationship," Applied Economics Letters, 1996, 3, 77-80
Downloads: (external link)
http://fmwww.bc.edu/EC-P/wp262.pdf full text (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:262
Access Statistics for this paper
More papers in Boston College Working Papers in Economics from Boston College Department of Economics Boston College, 140 Commonwealth Avenue, Chestnut Hill MA 02467 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F Baum ().