The purpose of this paper is to test the dependency of domestic investment on domestic saving in the Feldstein …-Horioka spirit. Our innovation is to use a de nition of investment that does not include foreign direct investment. We do so since … related to domestic saving in a meaningful way. Once we adopt, as the dependent variable, pure domestic investment the result …

, which is that even though global financial markets appear to be integrated, levels of saving and investment are correlated …