The standard intertemporal model of open economy with a dynamic budget constraint predicts that investment and saving should be cointegrated as long as the economy does not violate its budget constraint. Recent empirical studies of the long run investment-saving comovement for the 1947:1–1987:3 period US data, however, report conflicting findings: some studies find that the time series of inves...

That being so, this essay reviews an influential recent paper, which outlines the widely accepted case for treating current and future budget deficits as our most urgent economic policy priority. The results are not pretty. To a large extent, my review shows that the paper’s theoretical arguments are flawed, and the empirical evidence is inconclusive. Overall, the case for treating budget defic...

The empirical evidence that national saving and domestic investment are correlated, also known as Feldstein-Horioka (1980) Puzzle, has received significant attention in the literature since Feldstein and Horioka interpret it as an evidence of low international capital mobility. This paper argues that there is nothing mysterious in the finding that investment and saving are correlated. Since the...

the present research measures the household budget of 623 families residing in tehran with the aim of finding out the quality of the family welfare. while at the macro level, social welfare as a new concept is the product of the industrial society, at the micro level, it is accessible through promotion of the household budget. the study employs both qualitative and quantitative research methods...

The Congressional Budget Office’s analyses of the long-term effects of changes in federal fiscal policy include the effects of changes in federal budget deficits on aggregate output and income. Those effects depend on the responses of private saving and net inflows of foreign capital to changes in deficits. This paper reviews empirical estimates of those two effects and explains how changes in ...

Private saving behaviour has important consequences for the effectiveness of fiscal policy... Fiscal policy has been used as an antidote to weak activity during the most recent downturn and fiscal consolidation has been delayed in some countries because of its perceived costs in terms of lower activity. However, the impact of fiscal policy on aggregate demand depends on the responses of private...

General Authority for Educational Buildings (GAEB) in Egypt is responsible for new construction and maintenance of the educational building [1]. According to the Sixth Five- Years Plan in Egypt, the program of educational structures includes new construction of about 2915 schools, with 39.8 thousand classes. Also, maintenance works for buildings about 1250 schools. These works needs a high budg...

Falling long-term interest rates worldwide have led some policy-makers to speculate on the emergence of a glut of global saving (Bernanke, 2005). The global trend contrasts markedly with that of the United States, where the public discussion has focused on an ongoing decline of private saving and the re-emergence of large budget deficits. The absence of saving in the United States, in conjuncti...