How to Rationalize the Export-Saving Paradigm (the Czech experience)

The paper analyzes the relationship between saving and export in the Czech economy. Because the Czech economy has been increasingly trading with Western Europe, testing the relationship between these two variables is significant. OLS and 2SLS are applied to quarterly data between gross national savings, gross domestic product and exports over the period 1994 - 2001. The 2SLS procedure has also the advantage of identifying the underlying principles of the formal paradigm by means of instruments (productivity, real investments and unemployment). This study does lend support to the paradigm advanced by Maizels in 1968, which relates a country"s increase in domestic savings to exports.