The Feldstein-Horioka paradox: A selective survey of the literature

Susanne Lapp

No 752, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: The paper provides a selective survey of the literature on the Feldstein-Horioka paradox. The observed high correlation between national savings and domestic investment emerges as a robust empirical regularity. If this regularity is to be attributed to low capital mobility (due to government interventions or market imperfections) or other factors (such as immobility of goods, shocks or intertemporal budget constraints) cannot be resolved. The empirical evidence on the relative importance of the possible factors is too sketchy. Excluding government interventions, the possible impact of market imperfections in causing saving-investment corrrelations has hardly been investigated so far.

JEL-codes: E44 F21 F32 (search for similar items in EconPapers)
Date: 1996
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:752

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