Savings investment correlations and capital mobility in developing countries
The author estimates savings and investment correlations for 58 developing countries to assess the capital mobility (in the Feldstein-Horioka sense) in these countries. Using a new estimation technique (fully modified ordinary least squares) - which simultaneously corrects for serial correlation, endogeneity, and sample bias (asymptotically) - the author finds that many developing countries are financially integrated in the long run. More important, the estimates from this robust estimation technique indicate that savings-investment correlations are lower for middle-income than for lower-income countries. The author also provides evidence of capital mobility for several of these countries in the short run.
|Date of creation:||31 Oct 1993|
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- Lawrence H. Summers, 1988.
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National Bureau of Economic Research, Inc.
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- Tamim Bayoumi, 1990. "Saving-Investment Correlations: Immobile Capital, Government Policy, or Endogenous Behavior?," IMF Staff Papers, Palgrave Macmillan, vol. 37(2), pages 360-387, June.
- B. Douglas Bernheim & John B. Shoven, 1991. "National Saving and Economic Performance," NBER Books, National Bureau of Economic Research, Inc, number bern91-2. Full references (including those not matched with items on IDEAS)
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