The Feldstein-Horioka fact

Domenico Giannone () and Michele Lenza ()

No 873, Working Paper Series from European Central Bank

Abstract: This paper shows that general equilibrium effects can partly rationalize the high correlation between saving and investment rates observed in OECD countries. We find that once controlling for general equilibrium effects the saving-retention coefficient remains high in the 70’s but decreases considerably since the 80’s, consistently with the increased capital mobility in OECD countries. JEL Classification: C23, F32, F41.

Keywords: Saving-Investment Correlation; Capital Mobility; International Comovement; Dynamic Factor Model. (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cba and nep-opm
Date: Written 2008-02
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Related works:
Working Paper: The Feldstein-Horioka Fact (2004)
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