SAVING AND INVESTMENT: PARADIGMS, PUZZLES, POLICIES

The 1990s have seen a renewed interest in issues of capitalaccumulation and growth. New paradigms for saving, investment,and growth have been advanced to address theoretical and empiricalpuzzles and to guide the design of better policies. This paperprovides a policy-oriented review of recent theoretical andempirical work on the determinants of saving and investmentand on their links to growth. It takes stock of new findingsas well as still unresolved questions and gives particular attentionto empirical regularities and to the policy issues relevantto developing countries.