Revisiting the saving–investment relationship: the case of Canada

Canadian quarterly data are used to examine the long-run relationship between saving and investment using an ARDL approach. Bai-Perron tests identify several structural breaks. Cointegration is found for the 1962q−1970q4 period, when Canada operated under a fixed exchange rate system, and weaker evidence of cointegration is found for 2014q4−2023q4, with estimated saving-retention coefficients remaining high. The findings suggest that Canada’s saving–investment relationship is not stable over time, highlighting the importance of accounting for structural change.