Abstract:

As a result of the curl in the early 1990s, international financial and capital movements increased, a intense capital flow from developed countries to developing countries occurred. This has made it possible for savings and investments to be effectively allocated on the international markets. While these capital movements can have a positive impact on growth by increasing investments in countries, they may also lead to financial instability. Therefore, the lack of equal savings with investments can be a problem for countries. This study analyses the savings-investment relationship in the E7 countries with a lower savings rate. With the 1980-2018 year data, the new generation panel econometric tests have been carried out. According to the results obtained, the Feldstein-Horioka hypothesis is valid in the form that investments are funded by the international financial markets at a relatively low level.