Kumar, Saten and Rao, B. Bhaskara (2009): A Time Series Approach to the Feldstein-Horioka Puzzle with Panel Data from the OECD Countries.
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The Pedroni method is used to estimate the Feldstein-Horioka equation from 1960-2007 with a panel of 13 OECD countries. It is found that the Feldstein-Horioka puzzle exists in a weaker form with a much reduced saving retention coefficient. The Bretton Woods agreement in particular has weakened the Feldstein-Horioka puzzle by significantly improving the international capital mobility. In comparison the Maastricht agreement seems to have improved capital mobility only by a small magnitude. The structural break tests of Westerlund are used in this paper.
|Item Type:||MPRA Paper|
|Original Title:||A Time Series Approach to the Feldstein-Horioka Puzzle with Panel Data from the OECD Countries|
|Keywords:||Feldstein-Horioka puzzle; Structural breaks; Bretton Woods and Maastricht agreements; International capital mobility|
|Subjects:||C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C23 - Models with Panel Data; Longitudinal Data; Spatial Time Series
F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements
F - International Economics > F3 - International Finance > F36 - Financial Aspects of Economic Integration
|Depositing User:||Saten Kumar|
|Date Deposited:||08. Nov 2009 06:37|
|Last Modified:||20. Feb 2013 01:55|
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