TY  - GEN
AU  - Cavallo, Eduardo A.
AU  - Pedemonte, Mathieu
TI  - What is the Relationship between National Saving and Investment in Latin America and the Caribbean?
PY  - 2015
Y1  - 2015/09/16
DO  - 10.18235/0000138
AB  - Using panel co-integration techniques and a comprehensive dataset covering the period 1980-2013, this paper finds a positive and significant correlation between national saving and domestic investment rates in Latin America and the Caribbean (LAC).  The estimated correlation is approximately 0. 39; i. e. , for every 1 percentage point of GDP increase in national saving, domestic investment increases by 0. 39 percentage points on average.  There are however, three nuances to the headline result: i) the estimated correlation has been declining over time; ii) the regional average hides a large degree of intra-regional heterogeneity; and iii) the estimated coefficient is largest amongst the biggest economies in the region.  It is concluded that low national saving rates remain a binding constraint for capital accumulation in LAC.
UR  - https://doi.org/10.18235/0000138
ER  -