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Investment and Saving Relationship in South Asia

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  • Shabbir Ahmad

    (Department of Finance, College of Business, Effat University, Jeddah, KSA)

Abstract

This study tests the Feldstein and Horioka hypothesis (1980) for four South Asian developing economies and an oil producing economy, Saudi Arabia. Performing cointegration tests on annual data, the results indicate that approximately one to one long run relationship between investment and saving is present in India and Saudi Arabia thus validating the above hypothesis while a weak form relation for Bangladesh, Pakistan, and Sri Lanka shows the existence of Feldstein and Horioka puzzle.

Suggested Citation

  • Shabbir Ahmad, 2017. "Investment and Saving Relationship in South Asia," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 726-729.
    • Handle: RePEc:eco:journ1:2017-04-83
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    References listed on IDEAS

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    More about this item

    Keywords

    Saving-investment; Cointegration; South Asia;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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