Macroeconometric modeling of saving and investment for Mercosur countries

  • Tapen Sinha Instituto Tecnológico Autónomo de México
  • Dipendra Sinha Macquarie University
Keywords: Mercosur, macroeconomic crisis, econometrics, saving and investment

Abstract

In the long run, the present value of current account balance cannot grow indefinitely large without precipitating in a macroeconomic crisis. This simple insight produces an econometrically testable relationship between saving and investment. We use data for four countries, which belong to the MERCOSUR Common Trade Agreement: Argentina Brazil Paraguay and Uruguay. The results indicate that there is no long run relationship between saving and investment in these countries. Thus MERCOSUR IS likely to act as a palliative against such a possibility in the future.

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Published
01-01-1998
How to Cite
SinhaT., & SinhaD. (1998). Macroeconometric modeling of saving and investment for Mercosur countries. Estudios Económicos, 13(1), 57-72. https://doi.org/10.24201/ee.v13i1.241
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