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This paper uses new statistical estimates to compare two views of international capital mobility. With perfect world capital mobility, there would be little or no relation between the amount of saving generated in a country and the domestic investment in that country. In contrast, if portfolio preferences and institutional rigidities impede the flow of long-term capital among countries, increases in domestic saving would be reflected primarily in additional domestic investment. The statistical evidence presented here on the relation between domestic investment and saving implies that the truth lies closer to the second view than to the first. International differences in domestic savings rates among major industrial countries have resulted in almost equal corresponding differences in domestic investment rates.The paper discusses the compatability of this evidence with the obvious international mobility of short-term liquid capital and with the existence of substantial international flows of long-term portfolio and direct investments.There is a brief discussion of the relevance of the new evidence for the optimal national saving policy and for the analysis of tax incidence.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. : 81-6-6879-8586, Fax: 81-6-6878-2766, Email: horioka@iser.osaka-u.ac.jp Forthcoming in Journal of Money, Credit and Banking, vol. 39, no. 8 (December 2007). Terms of use: Documents in 1 AbstractIn this paper, we conduct a dynamic panel analysis of the determinants of the household saving rate in China using a life cycle model and panel data on Chinese provinces for the 1995-2004 period from China's household survey. We find that China's household saving rate has been high and rising and that the main determinants of variations over time and over space therein are the lagged saving rate, the income growth rate, (in many cases) the real interest rate, and (in some cases) the inflation rate. However, we find that the variables relating to the age structure of the population have the expected impact on the household saving rate in only one of the four samples. These results provide mixed support for the life cycle hypothesis as well as the permanent income hypothesis, are consistent with the existence of inertia or persistence, and imply that China's household saving rate will remain high for some time to come.Journal of Economic Literature classification numbers: D12, D91, E21, J10.

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In this paper, we analyze a variety of data on saving motives, bequest motives, and bequest division from the "Comparative Survey of Savings in Japan and the United States," a binational survey conducted in 1996 by the Institute for Posts and Telecommunications Policy of the Ministry of Posts andTelecommunications of the Government of Japan, in order to shed light on which model of household behavior applies in the two countries. We find (1) that the selfish life cycle model is the dominant model of household behavior in both countries but that it is far more applicable in Japan than it is in the U.S., (2) that the altruism model is far more applicable in the U.S. than it is in Japan but that it is not the dominant model of household behavior in either country, and (3) that the dynasty model is more applicable in Japan than it is in the U.S. but that it is of only limited applicability even in Japan.