Testing the direct substitutability hypothesis of saving

Abstract

This paper contains some tests for the direct substitutability hypotheses of household saving with respect to corporate and/or government saving by using an international data set from 12 OECD countries. On the whole findings suggest that the hypothesis according to which households pierce (partly) through the 'corporate veil' cannot be rejected, while the hypothesis that household subsume government behaviour under its own behaviour does not get clear support.