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Saving, investment and the net foreign asset position

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  • Hoffmann, Mathias

Abstract

Over the last two decades, countries have exhibited net foreign assets and liabilities. This paper develops an empirical model to examine the causes for the stock of the net foreign asset positions in 51 developing and industrialised countries. The reasons for significantly high or low net foreign asset positions can be derived from long-run trend differences in saving and investment. Using cointegration techniques, it is shown that GDP per capita, public debt and demographic factors influence long-run saving and investment and, hence, net external wealth of developing and industrialised countries.

Suggested Citation

  • Hoffmann, Mathias, 2005. "Saving, investment and the net foreign asset position," CFR Working Papers 05-09, University of Cologne, Centre for Financial Research (CFR).
  • Handle: RePEc:zbw:cfrwps:0509
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    More about this item

    Keywords

    Savings; Investment and Net Foreign Assets; Cointegrated Panel Data;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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