THE ARAB MONETARY FUND ISSUES A STUDY ON "CAPITAL FLOWS IN ARAB ECONOMIES: THE RELATIONSHIP BETWEEN INVESTMENT AND SAVING"

by **claud39** Mon Jan 18, 2021 5:26 pm

THE ARAB MONETARY FUND ISSUES A STUDY ON "CAPITAL FLOWS IN ARAB ECONOMIES: THE RELATIONSHIP BETWEEN INVESTMENT AND SAVING"

2021-01-18

The Arab Monetary Fund releases a study

About

" Capital flows in Arab economies: the relationship between investment and savings "

The heterogeneity of capital flows between Arab economies

Capital flows change over time in Arab economies

Promote local investment by increasing domestic savings in the long run

Within the framework of the efforts exerted by the Arab Monetary Fund in terms of studies and research activities with the aim of supporting the authorities in the Arab countries in the priority issues of developing the financial sector, the fund issued, within the framework of the “Financial Sector Development Studies Series,” a study on “ Capital Flows in Arab Economies: The Relationship Between Investment and savings . " The study aims to analyze the relationship between investment and saving in eight Arab countries during the period from 1970 to 2018, to verify whether local savings are translated into local investments.

The study also provides an analytical framework for policymakers in the Arab region, which contributes to enhancing understanding of this relationship, and thus shedding light on capital flows in the region.

Many studies in the economic literature have paid more attention to the relationship between investment and saving in advanced and developing economies to understand the evolution of this relationship over time. Specifically, more attention has been paid to the causal relationship from saving to investment, which provides evidence of global capital flows.

The results showed that the relationship between investment and saving reflects the heterogeneity of capital flows between the Arab economies under study, as evidenced by the effects of saving on investment during the entire sample period. In fact, the study revealed that in some countries that are more open compared to other economies, only a small portion of their domestic savings is translated into domestic investment, indicating that most of the savings likely flowed out of these countries.

The study also found that capital flows change over time, as the relationship between investment and saving differs across two sub-periods of the sample period for the Arab economies under study. This finding may help decision-makers in the Arab region to deal well with the changing relationship between investment and saving when dealing with capital flows.

Finally, the results showed unilateral causal relationships extending from saving to investment for all Arab countries under study in the long term, which may help policy makers in the Arab region to develop appropriate policies that aim to enhance domestic investment by increasing domestic savings in the long term. . The results of the study could be valid for other economies in the Arab region, as most of them combine common economic ties with the countries under study.

The full version of the study is available in English at this link

Under the title:

Capital Flows in Selected Arab Economies: Evidence from the Relationship between Investment and Savings

https://www.amf.org.ae/ar/content/%D8%B5%D9%86%D8%AF%D9%88%D9%82-%D8%A7%D9%84%D9%86%D9%82%D8%AF-%D8%A7%D9%84%D8%B9%D8%B1%D8%A8%D9%8A-%D9%8A%D9%8F%D8%B5%D8%AF%D8%B1-%D8%AF%D8%B1%D8%A7%D8%B3%D8%A9-%D8%AD%D9%88%D9%84-%D8%AA%D8%AF%D9%81%D9%82%D8%A7%D8%AA-%D8%B1%D8%A4%D9%88%D8%B3-%D8%A7%D9%84%D8%A3%D9%85%D9%88%D8%A7%D9%84-%D9%81%D9%8A-%D8%A7%D9%84%D8%A7%D9%82%D8%AA%D8%B5%D8%A7%D8%AF%D8%A7%D8%AA-%D8%A7%D9%84%D8%B9%D8%B1%D8%A8%D9%8A%D8%A9-%D8%A7%D9%84%D8%B9%D9%84%D8%A7%D9%82%D8%A9-%D8%A8%D9%8A%D9%86