Working Paper: NBER ID: w15519
Authors: Domenico Giannone; Michele Lenza
Abstract: This paper shows that general equilibrium effects can partly rationalize the high correlation between saving and investment rates observed in OECD countries. We find that once controlling for general equilibrium effects the saving-retention coefficient remains high in the 70's but decreases considerably since the 80's, consistently with the increased capital mobility in OECD countries.
Keywords: saving; investment; capital mobility; general equilibrium; OECD
JEL Codes: C23; F32; F41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| saving and investment rates (E21) | high correlation between saving and investment rates (E20) |
| global shocks (F69) | saving and investment rates (E21) |
| general equilibrium effects (D50) | high correlation between saving and investment rates (E20) |
| heterogeneous responses of countries to global shocks (F41) | saving-retention coefficient (C29) |
| saving-retention coefficient (1970s) (Q20) | saving-retention coefficient (1980s onward) (Q20) |
| increased capital mobility (F20) | saving-retention coefficient (C29) |