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Saving-Investment Relationship, Financial Crisis and Structural Changes in East Asian Countries

Author

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  • Carlos C. Bautista
  • Samuel Maveyraud-Tricoire

Abstract

In this article, the impact of the Asian crisis on the saving-investment relationship of selected East Asian countries with the rest of the world is examined using a Markov switching regression on East Asian countries. As a first result, estimates of the saving retention coefficients show that for most Asian countries, the Asian crisis period marks a shift from high saving retention coefficients during the pre-crisis period to low ones up to the end of the sample period. Low saving retention coefficients are also observed during the 1980s decade. For some countries, these coincide with certain phases of their development. A second result of interest is that periods with relatively low coefficient estimates, implying relatively higher capital mobility, are associated with current account surpluses. This result can be more explained by high and stable domestic saving rates than by low investment rates.

Suggested Citation

  • Carlos C. Bautista & Samuel Maveyraud-Tricoire, 2007. "Saving-Investment Relationship, Financial Crisis and Structural Changes in East Asian Countries," Economie Internationale, CEPII research center, issue 111, pages 81-99.
  • Handle: RePEc:cii:cepiei:2007-3td
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    File URL: http://www.economieinternationale.fr/IE/rev111/rev111d.htm
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    Cited by:

    1. Mariam Camarero & Juan Sapena & Cecilio Tamarit, 2020. "Modelling Time-Varying Parameters in Panel Data State-Space Frameworks: An Application to the Feldstein–Horioka Puzzle," Computational Economics, Springer;Society for Computational Economics, vol. 56(1), pages 87-114, June.
    2. Gábor Kutasi & Andrea Lőrincz & Eszter Szabó, 2019. "Impact of Savings on Capitalization: Case of Southeast Asian Economies," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 5(1), pages 30-40.
    3. Christophe Tavéra & Jean-Christophe Poutineau & Jean-Sébastien Pentecôte & Isabelle Cadoret & Arthur Charpentier, 2015. "The “mother of all puzzles” at thirty: A meta-analysis," International Economics, CEPII research center, issue 141, pages 80-96.
    4. 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.
    5. repec:cii:cepiei:2015-q1-141-5 is not listed on IDEAS
    6. Natalya Ketenci, 2016. "The Feldstein–Horioka Puzzle and Structural Breaks: Evidence from the Largest Countries of Asia," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 10(3), pages 337-354, August.
    7. Cécile Couharde & Cyriac Guillaumin, 2011. "Chocs externes et perspective d'union monétaire en Asie de l'Est : les enseignements d'un modèle VAR structurel," Post-Print halshs-00632373, HAL.
    8. 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.
    9. Mariam Camarero & Juan Sapena & Cecilio Tamarit, 2018. "FH Puzzle in the Eurozone: A time-varying analysis Preliminary Draft," Working Papers 1813, Department of Applied Economics II, Universidad de Valencia.
    10. Ketenci, Natalya, 2014. "The Feldstein –Horioka Puzzle and structural breaks: Evidence from the largest countries of Asia," MPRA Paper 54660, University Library of Munich, Germany.

    More about this item

    Keywords

    Saving-investment relationship; financial integration; asian crisis; markov-switching model;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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