Testing the validity of the Feldstein-Horioka puzzle for Australia

Saten Kumar, Scott Fargher and Don Webber
Additional contact information
Saten Kumar: Department of Business Economics, Auckland University of Technology
Scott Fargher: Department of Business Economics, Auckland University of Technology

No 911, Working Papers from Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol

Abstract: This paper presents an investigation into the relationship between investment and savings in Australia over the period 1960-2007. Using four time series techniques our results reveal that the Feldstein-Horioka puzzle exists in a weak form with a lower saving retention coefficient. Granger Causality tests illustrate that savings Granger cause investment both in the short and long runs. Our results suggest Australia could effectively adopt policies that focus on increasing investment through increasing domestic savings

Keywords: Savings; investment; capital mobility (search for similar items in EconPapers)
JEL-codes: C22 F21 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2009-07
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://carecon.org.uk/DPs/0911.pdf First version, 2009 (application/pdf)

Related works:
Journal Article: Testing the validity of the Feldstein--Horioka puzzle for Australia (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:uwe:wpaper:0911

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