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Saving, Investment, and the Regional Current Account: An Analysis of Canadian, British, and German Regions
Author:
Mr. Alun H. Thomas
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Series:
IMF Working Papers
Volume/Issue:
Volume 1993: Issue 062
Language:
English
Publication Date:
01 Aug 1993
DOI:
https://doi.org/10.5089/9781451848212.001
ISBN:
9781451848212
ISSN:
1018-5941
Pages:
28
Keywords:
WP; investment rate; government saving; investment relationship; investment correlation; investment difference; Private savings; Private investment; Public investment spending; Production growth; Income
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The relationship between regional saving and investment is examined to measure the extent of capital mobility. The relationship between total regional saving and investment is significantly negative in Canada and the United Kingdom, in contrast to the significant positive relationship found across countries. The difference is attributed to government subsidies to poor regions. The relationship between personal saving and private investment is insignificant in the U.K. and Germany and is negative in Canada which suggests that capital is mobile for individuals. The relationship between retained earnings and private investment is significantly positive in the U.K. and Canada suggesting capital immobility for firms but a test for the presence of regional corporate liquidity constraints yields no effects.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund