Saving and investment throughout the world

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Retrieve the most recent World Economic Outlook (WEO) from the web site of the International Monetary Fund (www.imf.org). In the Statistical Appendix, find the table titled "Summary of Sources and Uses of World Saving," which lists saving and investment (as a percentage of GDP) around the world. Use the data for the most recent year available to answer parts (a) and (b).

a. Does world saving equal investment? (You may ignore small statistical discrepancies.) Offer some intuition for your answer.

b. How does U.S. saving compare to U.S. investment? How is the United States able to finance its investment? (We explain this explicitly in the next chapter, but your intuition should help you figure it out now.)

c. The same publication has a table entitled "Table B14. Advanced Economies: Current Account Transactions." The Advanced countries are the United States, Germany, France, Italy, Spain, Japan, the United Kingdom, and Canada. Use this table to list the countries in which GNP is larger than GDP.

Reference no: EM131133327

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