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Saving, investment, and capital mobility: A comment on Leachman

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  • Jakob Haan
  • Clemens Siermann
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    Abstract

    In this note we use a consistent long-run data set recently published by Maddison (1991) for 10 countries to examine the long-run relationship between saving and investment. In contrast to recent findings of Leachman (1991) we conclude that saving and investment are cointegrated in many countries. Our results suggest that aggregate demand and supply shocks explain much of the time series correlation between total saving and investment. Copyright Kluwer Academic Publishers 1994

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    File URL: http://hdl.handle.net/10.1007/BF01000740
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    Bibliographic Info

    Article provided by Springer in its journal Open Economies Review.

    Volume (Year): 5 (1994)
    Issue (Month): 1 (March)
    Pages: 5-17

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    Handle: RePEc:kap:openec:v:5:y:1994:i:1:p:5-17

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    Web page: http://www.springerlink.com/link.asp?id=100323

    Related research

    Keywords: capital mobility; Feldstein-Horioko test; saving-investment correlation; cointegration;

    References

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    1. Martin Feldstein & Charles Horioka, 1979. "Domestic Savings and International Capital Flows," NBER Working Papers 0310, National Bureau of Economic Research, Inc.
    2. Martin Feldstein, 1982. "Domestic Saving and International Capital Movements in the Long Run and the Short Run," NBER Working Papers 0947, National Bureau of Economic Research, Inc.
    3. Martin Feldstein & Philippe Bacchetta, 1991. "National Saving and International Investment," NBER Chapters, in: National Saving and Economic Performance, pages 201-226 National Bureau of Economic Research, Inc.
    4. Michael Dooley & Jeffrey Frankel & Donald J. Mathieson, 1987. "International Capital Mobility: What Do Saving-Investment Correlations Tell Us?," IMF Staff Papers, Palgrave Macmillan, vol. 34(3), pages 503-530, September.
    5. Maddison, A., 1991. "A Long Run Perspective on Saving," Papers 443, Groningen State, Institute of Economic Research-.
    6. Murphy, Robert G., 1984. "Capital mobility and the relationship between saving and investment rates in OECD countries," Journal of International Money and Finance, Elsevier, vol. 3(3), pages 327-342, December.
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    Cited by:
    1. Coakley, Jerry & Kulasi, Farida, 1997. "Cointegration of long span saving and investment," Economics Letters, Elsevier, vol. 54(1), pages 1-6, January.
    2. Herwartz, H. & Xu, F., 2010. "A functional coefficient model view of the Feldstein-Horioka puzzle," Journal of International Money and Finance, Elsevier, vol. 29(1), pages 37-54, February.
    3. Abu N.M. Wahid & Mohammad Salahuddin & Abdullah M. Noman, 2010. "Savings and investment in South Asia: Evidence from likelihood ratio based panel cointegration," Journal of Economic Studies, Emerald Group Publishing, vol. 37(6), pages 658-666, September.
    4. Ramon Moreno, 1994. "Saving-investment dynamics and capital mobility in the U.S. and Japan," Pacific Basin Working Paper Series 94-05, Federal Reserve Bank of San Francisco.
    5. Guzel, Adnan & Ozdemir, Zeynel Abidin, 2011. "The Feldstein-Horioka puzzle in the presence of structural shifts: The case of Japan versus the USA," Research in International Business and Finance, Elsevier, vol. 25(2), pages 195-202, June.
    6. Apergis, Nicholas & Tsoumas, Chris, 2009. "A survey of the Feldstein-Horioka puzzle: What has been done and where we stand," Research in Economics, Elsevier, vol. 63(2), pages 64-76, June.
    7. Kumar Narayan, Paresh, 2005. "The relationship between saving and investment for Japan," Japan and the World Economy, Elsevier, vol. 17(3), pages 293-309, August.

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