Capital Mobility within EMU
Capital mobility is helpful to cope with the loss of adjustment instruments in EMU. High capital mobility in the sense of Feldstein and Horioka (FH) can limit the negative consequences of shocks affecting the saving capacity of an economy in the Eurozone. It is the aim of this paper to assess the likely degree of capital mobility in the FH sense within EMU. For this purpose, the FH approach is extended and updated. In particular, the role of current account targeting, exchange rate volatility and tax differentials as potential obstacles to capital mobility is analyzed. The empirical findings support the view that both current account targeting and exchange rate volatility were relevant for limiting the free flow of capital in the past. The conclusion is that within EMU domestic saving and investment will be less correlated than they were before the advent of the Euro.
|Date of creation:||1999|
|Contact details of provider:|| Postal: L 7,1; D - 68161 Mannheim|
Web page: http://www.zew.de/
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.:
- Jan Lemmen & Sylvester Eijffinger, 1995.
"The quantity approach to financial integration: The Feldstein-Horioka criterion revisited,"
Open Economies Review,
Springer, vol. 6(2), pages 145-165, April.
- Lemmen, J.J.G. & Eijffinger, S.C.W., 1993. "The quantity approach to financial integration : The Feldstein-Horioka criterion revisited," Discussion Paper 1993-20, Tilburg University, Center for Economic Research.
- Eijffinger, S.C.W., 1995. "The quantity approach to financial integration : The Feldstein-Horioka criterion revisited," Other publications TiSEM c03b04b7-a993-4cc0-b9fc-4, Tilburg University, School of Economics and Management.
- Lemmen, J.J.G. & Eijffinger, S., 1993. "The Quantity Approach of Financial Integration: The Feldstein-Horioka Criterion Revisited," Papers 9320, Tilburg - Center for Economic Research.
- John F. Helliwell & Ross McKitrick, 1999. "Comparing Capital Mobility Across Provincial and National Borders," Canadian Journal of Economics, Canadian Economics Association, vol. 32(5), pages 1164-1173, November.
- John F. Helliwell & Ross McKitrick, 1998. "Comparing Capital Mobility Across Provincial and National Borders," NBER Working Papers 6624, National Bureau of Economic Research, Inc.
- 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.
- Hogendorn, Christiaan, 1998. "Capital Mobility in Historical Perspective," Journal of Policy Modeling, Elsevier, vol. 20(2), pages 141-161, April.
- Sinn, Stefan, 1992. "Saving-Investment Correlations and Capital Mobility: On the Evidence from Annual Data," Economic Journal, Royal Economic Society, vol. 102(414), pages 1162-1170, September.
- Martin Feldstein & Philippe Bacchetta, 1991. "National Saving and International Investment," NBER Chapters, in: National Saving and Economic Performance, pages 201-226 National Bureau of Economic Research, Inc.
- Martin Feldstein & Philippe Bacchetta, 1989. "National Saving and International Investment," NBER Working Papers 3164, National Bureau of Economic Research, Inc.
- 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.
- James C. Ingram, 1959. "State and Regional Payments Mechanisms," The Quarterly Journal of Economics, Oxford University Press, vol. 73(4), pages 619-632. Full references (including those not matched with items on IDEAS)