International capital mobility: a re-visit of Feldstein-Horioka puzzle
This paper investigates the status of international capital mobility by reexamining the Felstein-Horioka (1980) puzzle. Data on savings and investment of 51 high-income countries were analyzed using System-GMM of Arellano and Bovver (1995)/ Blundell and Bond (1998). The β of a saving-retention coeff...
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| Main Authors: | , |
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| Format: | Conference or Workshop Item |
| Language: | English |
| Published: |
Faculty of Economics and Management, Universiti Putra Malaysia
2012
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| Online Access: | http://psasir.upm.edu.my/id/eprint/51273/1/12-23.pdf http://psasir.upm.edu.my/id/eprint/51273/ |
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| Summary: | This paper investigates the status of international capital mobility by reexamining the Felstein-Horioka (1980) puzzle. Data on savings and investment of 51 high-income countries were analyzed using System-GMM of Arellano and Bovver (1995)/ Blundell and Bond (1998). The β of a saving-retention coefficient of the System-GMM reads 0.17 signifying low correlation between the saving and the investment. Contrary to the Felstein-Horioka findings, the result suggests high capital mobility across high-income economies. The study further recommends acknowledging the increasing interrelations among countries in modeling international capital mobility. |
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