The role of government gross saving in financing imports of goods and services: A study in 18 OECD countries

Abstract

This study determines the impact of imports of goods and services on government gross savings and the consumer price index (CPI) through government expenditure. This study was conducted in 18 OECD countries during 2011-2022. A purposive sampling is used in determining sampling techniques, data analysis techniques and path analysis.  The OECD is used as a research object because it is a high-income country with a strong economy where government gross saving and CPI play an important role in the import of goods and services activities. Statistical results show CPI has a very high variability (184.97 %) followed by import variability (47.209 %) while government gross saving (22.37 %) and government expenditure (20.74 %) have the lowest variability and are relatively equal. The behaviour pattern of these variables supports the findings of this research.  Imports of goods and services affect government   expenditure, imports of goods and services affect government gross saving and imports of goods and services affect the CPI. When making fiscal policy, it is necessary to consider government expenditure because this variable serves as a mediator in the relationship between imports and government gross savings.