Another piece in the Feldstein-Horioka puzzle

Andrew J. Abbott, Glauco De Vita

Research output: Contribution to journalArticle

25 Citations (Scopus)

Abstract

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.
Original languageEnglish
Pages (from-to)69-89
Number of pages21
JournalScottish Journal of Political Economy
Volume50
Issue number1
DOIs
Publication statusPublished - Feb 2003

Fingerprint

Savings
Cointegration
Feldstein-Horioka puzzle
Financial integration
Feldstein-Horioka
Long-run relationship
Distributed lag
Capital mobility

Cite this

Another piece in the Feldstein-Horioka puzzle. / Abbott, Andrew J.; De Vita, Glauco.

In: Scottish Journal of Political Economy, Vol. 50, No. 1, 02.2003, p. 69-89.

Research output: Contribution to journalArticle

@article{1a43cac6559147948b1025040915d0b8,
title = "Another piece in the Feldstein-Horioka puzzle",
abstract = "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.",
author = "Abbott, {Andrew J.} and {De Vita}, Glauco",
year = "2003",
month = "2",
doi = "10.1111/1467-9485.00255",
language = "English",
volume = "50",
pages = "69--89",
journal = "Scottish Journal of Political Economy",
number = "1",

}

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

VL - 50

SP - 69

EP - 89

JO - Scottish Journal of Political Economy

JF - Scottish Journal of Political Economy

IS - 1

ER -