Comparative analysis of the degree of international capital mobility in Tunisia and Morocco: revised Feldstein Horioka approach
The main purpose of this paper is to assess the degree of capital mobility in Tunisia and Morocco. Using the methodology of Feldstein and Horioka (1980), we test the hypothesis of perfect capital mobility. The methodology that we have applied used time series econometric techniques, which included analyzing the stationary, co-integration and Error-Correction Model. On the other hand, we develop an Augmented Feldstein Horioka model by introducing additional variables to explain more effectively the degree of financial openness in these countries. We interpret the relationship between domestic saving and investment in the long-run as reflecting the solvency constraint. We find that saving and investment display a cointegration relationship that is consistent with the interpretation that a solvency constraint is binding for each country. The short and long run coefficients of correlation are significant and presenting a low value of estimation. We conclude that the degree of capital mobility is relatively high in Maghreb countries (Tunisia and Morocco).
Volume (Year): 5 (2013)
Issue (Month): 1 (June)
|Contact details of provider:|| Postal: Bucharest, 6th district, 47 Fabricii Street, Quadra Place, bl.J, fl.1, ap.12|
Web page: http://www.reaser.eu/pgsa/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Coakley, Jerry & Kulasi, Farida, 1997. "Cointegration of long span saving and investment," Economics Letters, Elsevier, vol. 54(1), pages 1-6, January.
- Feldstein, Martin & Horioka, Charles, 1980.
"Domestic Saving and International Capital Flows,"
Royal Economic Society, vol. 90(358), pages 314-329, June.
- Martin Feldstein & Charles Horioka, 1979. "Domestic Savings and International Capital Flows," NBER Working Papers 0310, National Bureau of Economic Research, Inc.
- Jos Jansen, W, 1996. "Estimating saving-investment correlations: evidence for OECD countries based on an error correction model," Journal of International Money and Finance, Elsevier, vol. 15(5), pages 749-781, October.
- Anindya Banerjee & Paolo Zanghieri, 2003. "A New Look at the Feldstein-Horioka Puzzle using an Integrated Panel," Working Papers 2003-22, CEPII research center. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:rse:wpaper:v:5:y:2013:i:1:p:33-43. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Manuela Epure)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.