The Saving-Investment Correlation in Greece, 1960-1997 : Implications for Capital Mobility

In this note, the national saving–domestic investment correlation is examined in terms of an error correction model to gain some insight into the degree of capital mobility, using Greek data for the period 1960–1997. In particular, we employ cointegration analysis with an emphasis on the error correction process of the time series on annual data for Greece. Our work follows the study of Bajo-Rubio [Appl. Econ. Lett. 5 (1998) 769] that deals with the case of Spain. However, we use a longer time period, which enable us to examine with more preciseness the saving–investment relationship in Greece and its implications for capital mobility. The results show that Greek domestic investments and national savings during 1960–1997 are to a great extent cointegrated and that a significant long-run relationship exists