Domestic Savings and International Capital Flows

Martin Feldstein, Charles Horioka

NBER Working Paper No. 310 (Also Reprint No. r0085)
Issued in 1979
NBER Program(s):   PE   ITI   IFM

How internationally mobile is the world's supply of capital? Does capital flow among industrial countries to equalize the yield to investors? Alternatively, does the saving that originates in a country remain 'to be invested there? Or does the truth lie somewhere between these two extremes? The answers to these questions are not only important for understanding the international capital market but are also critical for analyzing a wide range of issues including the nation's optimal rate of saving and the incidence of tax changes.

(265 K)

Published: Feldstein, Martin and Horioka, Charles. "Domestic Saving and International Capital Flows." The Economic Journal, Vol. 90, (June 1980), pp. 314-329.

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