The global side of the investment-saving puzzle

Byrne, J.P., Fazio, G. and Fiess, N. (2009) The global side of the investment-saving puzzle. Journal of Money, Credit and Banking, 41(5), pp. 1033-1040. (doi:10.1111/j.1538-4616.2009.00244.x)

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Abstract

In this paper, we reexamine the long-standing and puzzling correlation between national saving and investment in industrial countries. We apply an econometric methodology that allows us to separate idiosyncratic correlation at the country level from correlation at the global level. In a major break with the existing literature, we find no evidence of a long-run relationship in the idiosyncratic components of saving and investment. We also find that the global components in saving and investments commove, indicating that they react to shocks of a global nature.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Fiess, Dr Norbert and Fazio, Dr Giorgio and Byrne, Dr Joseph
Authors: Byrne, J.P., Fazio, G., and Fiess, N.
Subjects:H Social Sciences > HB Economic Theory
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Journal of Money, Credit and Banking
ISSN:0022-2879
ISSN (Online):1538-4616
Published Online:16 July 2009

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