Byrne, Joseph P.Fazio, GiorgioFiess, Norbert2012-03-302012-03-302009Journal of Money, Credit, and Banking00222879https://hdl.handle.net/10986/5481In this paper, we reexamine the long-standing and puzzling correlation between national saving and investment in industrial countries. We apply an econometric methodology that allows us to separate idiosyncratic correlation at the country level from correlation at the global level. In a major break with the existing literature, we find no evidence of a long-run relationship in the idiosyncratic components of saving and investment. We also find that the global components in saving and investments commove, indicating that they react to shocks of a global nature.ENMacroeconomics: ConsumptionSavingWealth E210CapitalInvestmentCapacity E220Macroeconomics: Production E230Journal ArticleWorld Bank