Has anybody read Martin Feldstein's essay, "Global capital Flows"? It 
appeared 
in the June 24th, 1995 edition of the Economist. One of the points made in 
the  
essay is that there is a strong relationship between national savings and  
investment. For OECD countries, between 1970 and 1992, "about two-thirds of 
each additional dollar of sustained saving remains at home to finance 
additional domestic investment." Feldstein argues that the relationship is  
robust to changes in the sample of time and of countries. 
 
Feldstein uses this relationship to argue that capital markets are highly 
segmented. Consequently, it is important that countries develop policies to 
increase national savings. Mexico's recent problems are an example of 
what happens when this does not occur. 
 
 
 
 
 
Stuart M. Glosser 
Dept. of Economics 
University of Wisconsin at Whitewater 
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(414) 472-5580 
(414) 472-1361