Savings-Investments Relationship in an Open Economy

This paper reviews the conceptual-theoretical framework related to the analysis of the savings-investments relationship in an open economy and reveals the main trends of the respective relationship in the consolidated market economies and emerging countries during the second part of the 20-th century and first decade of the 21-st century. In this context, the author proposes some improvements in the savings-investments relationship analysis methodology, emphasizing the role of the foreign trade balance stock on the values of discrepancy between the savings and investments and of the Feldstein-Horioka econometric model estimated parameters. The respective methodological improvements are applied in the case of Romania for the period 1990-2007. At the end of the paper some guidelines for the savings-investments relationship modeling are presented in order to avoid recession and assure the premises for a sustainable economic growth.