Capital mobility and the relationship between saving and investment rates in OECD countries

This paper considers tests that use data on saving and investment rates to determine the degree of international capital mobility. Two types of evidence are presented to show that a high correlation between saving and investment rates across OECD countries can be consistent with a high degree of capital mobility. This evidence qualifies the conclusions of previous studies and casts doubt on the usefulness of testing hypotheses about capital mobility with data on saving and investment rates.