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Revisit Feldstein-Horioka puzzle: evidence from Malaysia

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  • Chor Foon Tang

    ()
    (University of Malaya)

  • Hooi Hooi Lean

    ()
    (Economics Program, Universiti Sains Malaysia)

Abstract

The aim of this study is to re-visit the Feldstein and Horioka (1980) puzzle for Malaysia. The conventional bounds testing approach cannot show any evidence of cointegration between savings and investment. However, the result of our proposed rolling bounds test approach shows that the cointegrated relationship varied over time. In particular, the variables are cointegrated only prior to the Asian financial crisis and the Ringgit pegged regime in 1997/98.

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File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I3-P203.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 31 (2011)
Issue (Month): 3 ()
Pages: 2237-2249

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Handle: RePEc:ebl:ecbull:eb-10-00332

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Keywords: Malaysia; Rolling cointegration test; Savings-investment nexus;

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References

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