The Feldstein - Horioka Paradox, A Case Study of Turkey
Seyi Akadiri (),
Itodo Idoko Ahmed,
Ojonugwa Usman () and
Additional contact information
Itodo Idoko Ahmed: Department of Economics, Eastern Mediterranean University, Famagusta, Via Mersin 10, Turkey
Medhi Seraj: Department of Economics, Eastern Mediterranean University, Famagusta, Via Mersin 10, Turkey
Asian Economic and Financial Review, 2016, vol. 6, issue 12, 744-749
The Feldstein and Horioka (1980) is one of the globally reviewed issues in international finance and macroeconomics. The theory juxtapose relationships between saving rates and investment rates in a dynamic way, that capital mobility across nations, would act to match up incremental product of capital. It was argued that, savings (especially in unregulated international markets) would flow to countries that show a tendency of high investment opportunities. Thus, indigenous saving and investment rate would be uncorrelated. The main objective of this study is to evaluate saving - investment relationships in case of Turkey, using a Time Series (co-integration and Granger causality) analysis between the periods of 1960 ? 2014. From the findings, we discovered that a short and the long ? run relationship exist between the series, with a major structural break in 1993. The co-integration regression revealed presence of high capital mobility in Turkey. Thus, the Feldstein-Horioka paradox is a puzzle in Turkey.
Keywords: Saving rate; Investment rate; Capital mobility; Co-integration; Granger causality; International finance. (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:asi:aeafrj:2016:p:744-749
Access Statistics for this article
Asian Economic and Financial Review is currently edited by Dr. Qazi Muhammad Adnan Hye
More articles in Asian Economic and Financial Review from Asian Economic and Social Society 2637 E Atlantic Blvd #43110 Pompano Beach, FL 33062, USA.
Bibliographic data for series maintained by Chan Hoi Yan ().