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dc.titleWhat is the Relationship between National Saving and Investment in Latin America and the Caribbean?
dc.contributor.authorCavallo, Eduardo A.
dc.contributor.authorPedemonte, Mathieu
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coverageLatin America
dc.coverageThe Caribbean
dc.date.available2015-09-16T00:00:00
dc.date.issue2015-08-01T00:00:00
dc.description.abstractUsing 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.
dc.format.extent25
dc.identifier.doihttps://doi.org/10.18235/0000138
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/What-is-the-Relationship-between-National-Saving-and-Investment-in-Latin-America-and-the-Caribbean.pdf
dc.language.isoen
dc.mediumAdobe PDF
dc.publisherInter-American Development Bank
dc.subjectEconomy
dc.subjectInvestment
dc.subject.jelcodeC23 - Panel Data Models • Spatio-temporal Models
dc.subject.jelcodeE2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy
dc.subject.jelcodeF36 - Financial Aspects of Economic Integration
dc.subject.keywordsPanel cointegration;Investment;Feldstein-Horioka puzzle;Saving
dc.typeWorking Papers
idb.identifier.pubnumberWorking Papers
idb.operationRG-K1344
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