Saving, Investment and Growth in the Industrialized Countries: An Econometric Investigation
This paper is concerned with the joint determination of savings, investment, interest rates and economic growth in the industrialized countries over the last three decades. The key economic variables which concern us are plotted on figures 1–4 and are by now familiar to students of the world economy. Economic growth was buoyant through the 1960s, sluggish and volatile through the 1970s and more stable through the 1980s. World interest rates fell during the 1970s, but in the 1980s they surpassed their level of the 1960s. Investment performed strongly during the 1960s, weakly during the 1970s and weaker still during the 1980s. Private sector savings largely mirrored investment throughout the entire period.
KeywordsInterest Rate Real Interest Rate Commodity Price Real Rate Fiscal Deficit
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