An Econometric Model for Observing External Flow of Funds: Focus on Japan from 1980 to 2018

Nan Zhang ()
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Nan Zhang: Hiroshima Shudo University, Faculty of Economic Sciences

Chapter Chapter 5 in Flow of Funds Analysis, 2020, pp 171-209 from Springer

Abstract: Abstract In this chapter, a new methodology for developing a model for the external flow of funds (EFF) analysis is explained. A concept for developing an EFF analysis model is presented, the mechanism underlying the EFF is explained, and outlines of theoretical analyses from three different viewpoints are provided: the savings–investments balance, current balance flows, and international capital flows. Using this theoretical framework and the concepts of “net” and “two-way,” a descriptive statistical analysis is revealed to observe the characteristics of Japan’s capital outflows and inflows. Then, using economic and econometric theories, a simultaneous equation model is developed for EFF analysis and run the model to interpret the quantitative relationship of Japan’s EFF.

Keywords: Global flow of funds; Model flowchart; Structural equations; 3SLS (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-15-7720-8_5

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DOI: 10.1007/978-981-15-7720-8_5

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