TY - JOUR
T1 - Another piece in the Feldstein-Horioka puzzle
AU - Abbott, Andrew J.
AU - De Vita, Glauco
PY - 2003/2
Y1 - 2003/2
N2 - Using UK quarterly data, we re-examine the nature and degree of the relationshipbetween savings and investment by means of a newly developed bounds testingprocedure to cointegration within an autoregressive distributed lag (ARDL)framework. Our finding of cointegration in all samples considered is consistent withthe view that the long-run relationship between savings and investment is notexclusively dependent upon the level of financial integration. The evidence alsoindicates that this relationship weakens after the abolition of UK controls oncapital flows in 1979, suggesting that the Feldstein-Horioka framework providesat least a partial measure of the degree of capital mobility.
AB - Using UK quarterly data, we re-examine the nature and degree of the relationshipbetween savings and investment by means of a newly developed bounds testingprocedure to cointegration within an autoregressive distributed lag (ARDL)framework. Our finding of cointegration in all samples considered is consistent withthe view that the long-run relationship between savings and investment is notexclusively dependent upon the level of financial integration. The evidence alsoindicates that this relationship weakens after the abolition of UK controls oncapital flows in 1979, suggesting that the Feldstein-Horioka framework providesat least a partial measure of the degree of capital mobility.
UR - http://onlinelibrary.wiley.com/doi/10.1111/1467-9485.00255/full
U2 - 10.1111/1467-9485.00255
DO - 10.1111/1467-9485.00255
M3 - Article
SN - 1467-9485
VL - 50
SP - 69
EP - 89
JO - Scottish Journal of Political Economy
JF - Scottish Journal of Political Economy
IS - 1
ER -