The Saving-Investment Relationships : A Markov Switching Causality Analysis of Cote D'Ivoire and Ghana

This paper investigates the empirical saving-investment relationships for Cote d'Ivoire and Ghana over the period 1960-1998, using a Markov Switching VAR model. We find regime-dependent causality from saving to investment in Cote d'Ivoire but not in Ghana. In terms of Feldstein and Horioka (1980) capital mobility hypothesis these findings suggest a more capital mobility in Ghana than in Cote d'Ivoire implying that foreign capital flows towards Cote d'Ivoire and not to Ghana during the studied period