The Measurement of International Capital Mobility by Using Error Correction Model in Korea

Hong Kee Kim
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Hong Kee Kim: Hannam University

Korean Economic Review, 1998, vol. 14, 309-322

Abstract: This study aims at measuring the international capital mobility in Korea, taking into consideration short run and long run relationship between savings and investment. Whereas the long run relationship between saving and investment implies intertemporal budget constraint, short run relationship may measure the degree of international capital mobility. Many other specification equations which have been used to gauge correlation of investment and saving, are one of constrained error correction model. The result of estimation by using error correction model shows that the traditional equations estimated by many other authors have specification error and there doesn't exist Feldstein and Horioka 's puzzle and international capital mobility has increased rapidly since 1980s in Korea.

Keywords: Capital Mobility; Error Correction Model (search for similar items in EconPapers)
JEL-codes: C1 E0 F2 (search for similar items in EconPapers)
Date: 1998
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