Are saving and investment cointegrated? An ARDL bounds testing approach

Glauco De Vita, Andrew Abbott

Research output: Contribution to journalArticle

76 Citations (Scopus)

Abstract

Using the newly developed ARDL bounds testing procedure, we find that, as implied by the intertemporal budget constraint, U.S. saving and investment rates cointegrate in all sample periods considered. Our results also show that the saving–investment correlation weakens after 1971, suggesting that the Feldstein–Horioka approach provides an at least partially informative measure of capital mobility.
Original languageEnglish
Pages (from-to)293-299
Number of pages7
JournalEconomics Letters
Volume77
Issue number2
Early online date9 Jun 2002
DOIs
Publication statusPublished - Oct 2002

Keywords

  • Capital mobility
  • Cointegration
  • Feldstein–Horioka puzzle
  • Saving–investment

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