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Savings-Investments Relationship in an Open Economy

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  • Florin-Marius PAVELESCU

    () (Institute of National Economy)

Abstract

This paper reviews the conceptual-theoretical framework related to the analysis of the savings-investments relationship in an open economy and reveals the main trends of the respective relationship in the consolidated market economies and emerging countries during the second part of the 20-th century and first decade of the 21-st century. In this context, the author proposes some improvements in the savings-investments relationship analysis methodology, emphasizing the role of the foreign trade balance stock on the values of discrepancy between the savings and investments and of the Feldstein-Horioka econometric model estimated parameters. The respective methodological improvements are applied in the case of Romania for the period 1990-2007. At the end of the paper some guidelines for the savings-investments relationship modeling are presented in order to avoid recession and assure the premises for a sustainable economic growth.

Suggested Citation

  • Florin-Marius PAVELESCU, 2009. "Savings-Investments Relationship in an Open Economy," Romanian Journal of Economics, Institute of National Economy, vol. 29(2(38)), pages 85-106, December.
  • Handle: RePEc:ine:journl:v:2:y:2009:i:38:p:85-106
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    Cited by:

    1. Damir PIPLICA, 2015. "Political Influence on Creating of Saving-Investment Gap in Transition Countries," Journal of Economics and Political Economy, KSP Journals, vol. 2(4), pages 445-459, December.

    More about this item

    Keywords

    state budget deficit; external trade balance stock; Grubel-Lloyd Index generalized form; Feldstein-Horioka model; error-correction model.;

    JEL classification:

    • B23 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Econometrics; Quantitative and Mathematical Studies
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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