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

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Listed author(s):
  • 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.]

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File URL: https://mpra.ub.uni-muenchen.de/39383/1/MPRA_paper_39383.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 39383.

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Date of creation: 18 Feb 2010
Publication status: Published in INTERNATIONAL JOURNAL OF ECONOMICS 1.4(2010): pp. 71-90
Handle: RePEc:pra:mprapa:39383
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Keywords: Savings; Investment; Capital Mobility and EU;

Find related papers by JEL classification:

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

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  1. Obstfeld,Maurice & Taylor,Alan M., 2005. "Global Capital Markets," Cambridge Books, Cambridge University Press, number 9780521671798, October.
  2. Elliott, Graham, 1999. "Efficient Tests for a Unit Root When the Initial Observation Is Drawn from Its Unconditional Distribution," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 767-783, August.
  3. Kollias, Christos & Mylonidis, Nikolaos & Paleologou, Suzanna-Maria, 2008. "The Feldstein-Horioka puzzle across EU members: Evidence from the ARDL bounds approach and panel data," International Review of Economics & Finance, Elsevier, vol. 17(3), pages 380-387.
  4. 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.
  5. Krol, Robert, 1996. "International capital mobility: evidence from panel data," Journal of International Money and Finance, Elsevier, vol. 15(3), pages 467-474, June.
  6. Perron, Pierre & Rodriguez, Gabriel, 2003. "GLS detrending, efficient unit root tests and structural change," Journal of Econometrics, Elsevier, vol. 115(1), pages 1-27, July.
  7. 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.
  8. Feldstein, Martin & Horioka, Charles, 1980. "Domestic Saving and International Capital Flows," Economic Journal, Royal Economic Society, vol. 90(358), pages 314-329, June.
  9. Elliott, Graham & Rothenberg, Thomas J & Stock, James H, 1996. "Efficient Tests for an Autoregressive Unit Root," Econometrica, Econometric Society, vol. 64(4), pages 813-836, July.
  10. W. Jansen, 1998. "Interpreting Saving-Investment Correlations," Open Economies Review, Springer, vol. 9(3), pages 207-219, July.
  11. 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.
  12. Jerry Coakley & Ana-Maria Fuertes & Fabio Spagnolo, 2004. "Is the Feldstein-Horioka Puzzle History?," Manchester School, University of Manchester, vol. 72(5), pages 569-590, 09.
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Cited by:

  1. 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.
  2. Wang, Shoukun, 2016. "China's interregional capital mobility: A spatial econometric estimation," China Economic Review, Elsevier, vol. 41(C), pages 114-128.
  3. repec:spr:inrvec:v:64:y:2017:i:3:d:10.1007_s12232-017-0272-9 is not listed on IDEAS

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