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Rajarshi Mitra
 
''Domestic Saving-Investment Correlation Puzzle Revisited: A Time Series Analysis for South Africa.''
( 2017, Vol. 37 No.2 )
 
 
The correlation between domestic saving and investment rates and its implications for international capital flows is well documented. This paper re-examines the short-run and long-run domestic saving-investment correlation in South Africa. The period of study is 1960-2014. Domestic saving rate is found to have significantly positive long-run effect on domestic investment rate. Granger causality indicates short-run bidirectional causality between domestic saving and investment rates. Domestic saving policies could, therefore, be expected to significantly increase domestic investment in South Africa.
 
 
Keywords: Cointegration, Investment, Savings, VECM.
JEL: O1 - Economic Development: General
F1 - Trade: General
 
Manuscript Received : Mar 08 2017 Manuscript Accepted : Jun 05 2017

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