If there is a strong relationship between domestic investment and domestic saving rates, the policies that stimulate domestic saving will in turn increase the growth rate, via the increase in investment. However if there is not a strong relationship between these variables, such policies will not be so effective on the investment. Feldstein and Horioka (1980) argued that the relationship between domestic investment and domestic saving rates is related with the international capital mobility and thus caused the rise of a puzzle in the economic literature. In this study the long run relationship between domestic investment and domestic saving rates in Turkey is investigated and Pesaran et al. (2001) cointegration method is usedin the empirical analysis.
Key words: YOK Article Language: EnglishTurkish
| 
