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Revisiting the Feldstein-Horioka Hypothesis of savings, investment and capital mobility: evidence from 27 EU countries

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  • Mohammad, Masud Alam
  • Mohammad, Rafiqul Islam

Abstract

This paper is an attempt to estimate the magnitude of integration for capital mobility among EU economies for the time period 1991-2009. It has been empirically observed that there is strong evidence in favor of higher degree of capital mobility for many EU countries, especially at euro currency period and in euro zone. We conclude that short run and long run capital mobility test based on Feldstein-Horioka (F-H) estimation method is likely to provide a measure of EU capital mobility.]

Suggested Citation

  • Mohammad, Masud Alam & Mohammad, Rafiqul Islam, 2010. "Revisiting the Feldstein-Horioka Hypothesis of savings, investment and capital mobility: evidence from 27 EU countries," MPRA Paper 39383, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:39383
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    References listed on IDEAS

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    1. Dimitris Christopoulos, 2007. "A reassessment of the Feldstein-Horioka hypothesis of perfect capital mobility: evidence from historical data," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 34(3), pages 273-280, July.
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    4. Martin Feldstein, 1991. "Domestic Saving and International Capital Movements in the Long Run and the Short Run," NBER Chapters, in: International Volatility and Economic Growth: The First Ten Years of The International Seminar on Macroeconomics, pages 331-353, National Bureau of Economic Research, Inc.
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    7. Jansen, W Jos & Schulze, Gunther G, 1996. "Theory-Based Measurement of the Saving-Investment Correlation with an Application to Norway," Economic Inquiry, Western Economic Association International, vol. 34(1), pages 116-132, January.
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    10. Olivier Blanchard & Francesco Giavazzi, 2002. "Current Account Deficits in the Euro Area: The End of the Feldstein Horioka Puzzle?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 33(2), pages 147-210.
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    Cited by:

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    2. Farzad Mirmahboub, 2017. "Financial integration faced with the crisis: comparative cases of Greece and Portugal," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 64(3), pages 269-284, September.
    3. Mark J. Holmes & Jesús Otero, 2015. "A Pairwise-Based Approach to Examine the Feldstein-Horioka Condition of International Capital Mobility," Working Papers in Economics 15/01, University of Waikato.
    4. Wang, Shoukun, 2016. "China's interregional capital mobility: A spatial econometric estimation," China Economic Review, Elsevier, vol. 41(C), pages 114-128.
    5. Ganic Mehmed & Novalic Amila, 2023. "Does regional trade integration reinforce or weaken capital mobility? New evidence from four free trade areas," Economics and Business Review, Sciendo, vol. 9(3), pages 239-264, October.
    6. Mohammadreza Mahmoudi, 2021. "Identifying the Main Factors of Iran's Economic Growth using Growth Accounting Framework," Papers 2109.02787, arXiv.org, revised Oct 2021.

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    More about this item

    Keywords

    Savings; Investment; Capital Mobility and EU;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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