The Study of Saving and Investment Relationship Across 189 Countries : A Panel Data Analysis of the Feldstein-Horioka Puzzle

This paper estimates the domestic saving-investment correlations for 189 countries in the period 1980-2020 to study if the Feldstein-Horioka Puzzle still holds. We construct a panel data regression model with multiple econometric specifications and find a pair of U-shape Patterns in developing countries and developed countries in the period 1980-2020. Our regression results show that all the saving-investment correlation coefficients are statistically significant at a 1% level and offer new insight that the F-H Puzzle does not hold from the period 1980-2020 across 189 countries but may be robust in developing countries