02113cas a2200265 a 4500 AALejournalIMF021076 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513548579 1018-5941 BD-DhAAL BD-DhAAL David, Antonio. Reexamining the National Savings-Investment Nexus Across Time and Countries / Antonio David, Carlos Eduardo Goncalves, Alejandro Werner. Washington, D.C. : International Monetary Fund, 2020. 1 online resource (35 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Domestic savings and investment are positively correlated across countries and through time, as Feldstein-Horioka (FH) unveiled 40 years ago. We argue that an interpretation of this correlation based on market failures is more consistent with data patterns than alternative hypotheses. Moreover, resorting to instrumental variables techniques, we conclude that the relationship is causal: an exogenous rise in savings increases investment. This result holds in the full sample of countries and for emerging and developing economies, but there is evidence that the positive association in advanced economies is due to endogeneity bias. The core of our identification strategy relies on the idea that population age structure influences savings, but not total investment directly. Specifically, we use the share of adults in the [35-49] years of age bracket as an instrument for savings. Our estimates pass weak-instruments robust inference. Mode of access: Internet Goncalves, Carlos Eduardo. Werner, Alejandro. IMF Working Papers; Working Paper ; No. 2020/124 Full text available on IMF http://elibrary.imf.org/view/journals/001/2020/124/001.2020.issue-124-en.xml IMF e-Library