Feldstein–Horioka puzzle

The Feldstein-Horioka puzzle originates from an article in the 1980s that found that among OECD countries, averages of long-term national savings rates are highly correlated with similar averages of domestic investment rates. Standard economic theory suggests that in relatively open international financial markets, the savings of any country would flow to countries with the most productive investment opportunities; hence, saving rates and domestic investment rates would be uncorrelated, contrary to the empirical evidence suggested by Martin Feldstein and Charles Horioka. While numerous articles regarding the puzzle have been published, none of the explanations put forth have adequate empirical support.

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Source: List of unsolved problems in economics (CC BY-SA 4.0)