Theory-Based Measurement of the Saving-Investment Correlation with an Application to Norway
The work of Martin Feldstein and Charles Horioka (1980) has stimulated much research on the correlations of national savings and investment rates and their relation to the degree of international capital mobility. Theory implies a cointegrating relation between these variables, which suggests this correlation is measured best by an error-correction model. This model includes all previous specifications as special cases, which the authors show are potentially misspecified on theoretical grounds. Applied to Norway, their model outperforms prevailing specifications. The authors detect structural breaks and find that the correlation's time profile is consistent with other indicators of capital mobility. Copyright 1996 by Oxford University Press.
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- Frederic S. Mishkin, 1988.
"Understanding Real Interest Rates,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 70(5), pages 1064-1072.
- Mishkin, F.S., 1988. "Understanding Real Interest Rates," Papers fb-_88-40, Columbia - Graduate School of Business.
- Frederic S. Mishkin, 1988. "Understanding Real Interest Rates," NBER Working Papers 2691, National Bureau of Economic Research, Inc.
- 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.
- Feldstein, Martin & Horioka, Charles, 1980. "Domestic Saving and International Capital Flows," Economic Journal, 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.
- Murphy, Robert G., 1986. "Productivity shocks, non-traded goods and optimal capital accumulation," European Economic Review, Elsevier, vol. 30(5), pages 1081-1095, October. Full references (including those not matched with items on IDEAS)
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