THE FELDSTEIN – HORIOKA PARADOX, A CASE STUDY OF TURKEY
Journal Title: Asian Economic and Financial Review - Year 2016, Vol 6, Issue 12
Abstract
The Feldstein and Horioka (1980) is one of the globally reviewed issues in international finance and macroeconomics. The theory juxtapose relationships between saving rates and investment rates in a dynamic way, that capital mobility across nations, would act to match up incremental product of capital. It was argued that, savings (especially in unregulated international markets) would flow to countries that show a tendency of high investment opportunities. Thus, indigenous saving and investment rate would be uncorrelated. The main objective of this study is to evaluate saving - investment relationships in case of Turkey, using a Time Series (co-integration and Granger causality) analysis between the periods of 1960 ? 2014. From the findings, we discovered that a short and the long ? run relationship exist between the series, with a major structural break in 1993. The co-integration regression revealed presence of high capital mobility in Turkey. Thus, the Feldstein-Horioka paradox is a puzzle in Turkey.
Authors and Affiliations
Seyi Saint Akadiri*| Eastern Mediterranean University, Itodo Idoko Ahmed| Department of Economics, Eastern Mediterranean University, Famagusta, Via Mersin 10, Turkey, Ojonugwa Usman| Department of Economics, Eastern Mediterranean University, Famagusta, Via Mersin 10, Turkey, Medhi Seraj| Department of Economics, Eastern Mediterranean University, Famagusta, Via Mersin 10, Turkey
Keywords
Related Articles
- EP ID EP2317
- DOI -
- Views 461
- Downloads 36
EVA VERSUS OTHER PERFORMANCE MEASURES
Create value not only intended to satisfy shareholders. This is also the way to ensure the ability of the company to ensure its sustainability and finance its growth. The company will not attract new capital if it destro...
TRADE FLOWS AND EXCHANGE RATE SHOCKS IN NIGERIA: AN EMPIRICAL RESULT
In this paper, we explored the J-curve effect based on Nigerian data by adopting the vector error correction methodology. The results of the study indicated a cyclical feedback between the trade balance and the real exch...
An Empirical Analysis of the Determinants of Household Poverty in Turkey
This paper investigates the determinants of household poverty in Turkey using ordered logit model. It also focuses on parallel regression hypothesis and uses generalized ordered logit model. In this study, the data has b...
GAUGING MALAYSIAN CONSUMERS PERSPECTIVES ABOUT CORPORATE SOCIAL RESPONSIBILITY
This research was carried out on the premise that as CSR was becoming popular among corporations in Malaysia, it was important to gauge consumers? beliefs and perspectives about CSR and the CSR issues that mattered to th...
THE DETERMINANTS OF MARKET EMPLOYMENT CAPACITY OF ENTERPRISES IN JIGAWA STATE OF NIGERIA
This paper examines the determinants of market employment capacity of enterprises in Jigawa state, we used primary data collected from 300 entrepreneurs drawn base on purposive and random sampling techniques from three m...