The saving-investment correlation in Greece, 1960-1997: implications for capital mobility

In this note, the national saving-domestic investment correlation is examined in terms of an error correction model to gain some insight into the degree of capital mobility, using Greek data for the period 1960-1997. In particular, we employ cointegration analysis with an emphasis on the error correction process of the time series on annual data for Greece. Our work follows the study of Bajo-Rubio [Appl. Econ. Lett. 5 (1998) 769] that deals with the case of Spain. However, we use a longer time period, which enable us to examine with more preciseness the saving-investment relationship in Greece and its implications for capital mobility. The results show that Greek domestic investments and national savings during 1960-1997 are to a great extent cointegrated and that a significant long-run relationship exists. (C) 2003 Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.