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Saving-investment Dynamics and capital Mobility in the BRICS

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  • Smruti Ranjan BEHERA

Abstract

This study examines the saving-investment relationship and the extent of capital mobility in the BRICS over the period 1970-2013. However, saving and investment are cointegrated, but the error correction model exhibits structural instability with the onset of different country-specific crisis and over the period of global financial crisis in 2008. The inclusion of interactive dummy variables reveals that current period pass through of saving to investment is negative and statistically significant for the post-1980 period in Brazil, and over 1990s and 2000s in South Africa, indicative of capital mobility. Furthermore, the global financial crisis affects the exchange rate depreciation in Russia.

Suggested Citation

  • Smruti Ranjan BEHERA, 2015. "Saving-investment Dynamics and capital Mobility in the BRICS," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 15(1), pages 5-16.
    • Handle: RePEc:eaa:aeinde:v:15:y:2015:i:1_1
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    Cited by:

    1. Rajarshi Mitra, 2017. "Domestic Saving-Investment Correlation Puzzle Revisited: A Time Series Analysis for South Africa," Economics Bulletin, AccessEcon, vol. 37(2), pages 1217-1225.
    2. Phiri, Andrew, 2019. "The Feldstein-Horioka Puzzle and the Global Financial Crisis: Evidence from South Africa using Asymmetric Cointegration Analysis," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 72(2), pages 139-170.
    3. Phiri, Andrew, 2017. "The Feldstein-Horioka puzzle and the global recession period: Evidence from South Africa using asymmetric cointegration analysis," MPRA Paper 79096, University Library of Munich, Germany.

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    More about this item

    Keywords

    Capital Mobility; Savings; Investment; Error-Correction Model.;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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