Openness, size, and the saving-investment relationship

It is commonly believed that since saving is a source of funding for investment, any policy that is designed to stimulate saving, will also stimulate investment. This paper re-examines the relationship between national saving and investment. Results from a panel of 126 economies over the period 1960-2000 provide strong support for systematic effects of country-size as well as openness on the saving-investment relationship.