Panel data model comparison for empirical saving-investment relations

Helmut Herwartz and Fang Xu

Applied Economics Letters, 2009, vol. 16, issue 8, 803-807

Abstract: The Feldstein-Horioka puzzle has triggered a broad range of econometric specifications to investigate saving-investment (SI) relations. In this article, we attempt to determine a family of econometric models that is most suitable in explaining actual ratios of domestic investment to GDP via cross-validation techniques. Comparing between, pooled, time and country dependent specifications of the SI relation, the country dependent model is best performing. Moreover, error correction models formalizing adjustment dynamics of domestic investment ratios are markedly outperformed by static panel models. Supporting evidence for a cointegration relation between domestic saving and investment ratios is not found.

Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://www.informaworld.com/openurl?genre=article& ... 40C6AD35DC6213A474B5 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:16:y:2009:i:8:p:803-807

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEL20

DOI: 10.1080/13504850701221949

Access Statistics for this article

Applied Economics Letters is currently edited by Anita Phillips

More articles in Applied Economics Letters from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().