Re-examining the Feldstein-Horioka and Sachs' views of capital mobility: A heterogeneous panel setup

We re-examine two complementary views of international capital mobility using data for 25 OECD countries over the period 1970-2011. Estimation of the original Feldstein-Horioka and Sachs' equations provides mixed evidence of capital mobility, though we do not detect a significant bias towards f...

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Autores Principales: Holmes, Mark J., Otero, Jesus
Formato: Artículo (Article)
Lenguaje:Inglés (English)
Publicado: Elsevier Inc. 2014
Materias:
Acceso en línea:https://repository.urosario.edu.co/handle/10336/22174
https://doi.org/10.1016/j.iref.2014.03.002
id ir-10336-22174
recordtype dspace
spelling ir-10336-221742022-05-02T12:37:20Z Re-examining the Feldstein-Horioka and Sachs' views of capital mobility: A heterogeneous panel setup Holmes, Mark J. Otero, Jesus Capital mobility Current account Feldstein-Horioka Heterogeneous panel We re-examine two complementary views of international capital mobility using data for 25 OECD countries over the period 1970-2011. Estimation of the original Feldstein-Horioka and Sachs' equations provides mixed evidence of capital mobility, though we do not detect a significant bias towards finding in favour of capital immobility in using time-averaged data. However, potential bias in cross-sectional estimation motivates us to examine the data as a heterogeneous panel which allows us to control for the effects of cross-sectional dependence and endogeneity. In addressing the Feldstein-Horioka puzzle, application of the CCEMG estimator of Pesaran (2006) to the Feldstein-Horioka and Sachs' equations points towards greater (though not perfect) capital mobility than hitherto found. © 2014 Elsevier Inc. 2014 2020-05-25T23:55:41Z info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion 10590560 https://repository.urosario.edu.co/handle/10336/22174 https://doi.org/10.1016/j.iref.2014.03.002 eng info:eu-repo/semantics/openAccess application/pdf Elsevier Inc. instname:Universidad del Rosario
institution EdocUR - Universidad del Rosario
collection DSpace
language Inglés (English)
topic Capital mobility
Current account
Feldstein-Horioka
Heterogeneous panel
spellingShingle Capital mobility
Current account
Feldstein-Horioka
Heterogeneous panel
Holmes, Mark J.
Otero, Jesus
Re-examining the Feldstein-Horioka and Sachs' views of capital mobility: A heterogeneous panel setup
description We re-examine two complementary views of international capital mobility using data for 25 OECD countries over the period 1970-2011. Estimation of the original Feldstein-Horioka and Sachs' equations provides mixed evidence of capital mobility, though we do not detect a significant bias towards finding in favour of capital immobility in using time-averaged data. However, potential bias in cross-sectional estimation motivates us to examine the data as a heterogeneous panel which allows us to control for the effects of cross-sectional dependence and endogeneity. In addressing the Feldstein-Horioka puzzle, application of the CCEMG estimator of Pesaran (2006) to the Feldstein-Horioka and Sachs' equations points towards greater (though not perfect) capital mobility than hitherto found. © 2014 Elsevier Inc.
format Artículo (Article)
author Holmes, Mark J.
Otero, Jesus
author_facet Holmes, Mark J.
Otero, Jesus
author_sort Holmes, Mark J.
title Re-examining the Feldstein-Horioka and Sachs' views of capital mobility: A heterogeneous panel setup
title_short Re-examining the Feldstein-Horioka and Sachs' views of capital mobility: A heterogeneous panel setup
title_full Re-examining the Feldstein-Horioka and Sachs' views of capital mobility: A heterogeneous panel setup
title_fullStr Re-examining the Feldstein-Horioka and Sachs' views of capital mobility: A heterogeneous panel setup
title_full_unstemmed Re-examining the Feldstein-Horioka and Sachs' views of capital mobility: A heterogeneous panel setup
title_sort re-examining the feldstein-horioka and sachs' views of capital mobility: a heterogeneous panel setup
publisher Elsevier Inc.
publishDate 2014
url https://repository.urosario.edu.co/handle/10336/22174
https://doi.org/10.1016/j.iref.2014.03.002
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score 12,131701