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 462
- Downloads 36
A STUDY ON FACTORS AFFECTING TURNOVER INTENTION OF HOTEL EMPOLYEES
This study used linear structural modeling to explore the factors affecting the turnover intention of hotel employees in Taiwan. A total of 400 questionnaires were distributed to hotel employees. Among these, 350 were va...
THE SUSTAINABILITY OF EXTERNAL ADJUSTMENT PROCESS IN TUNISIA: LESSONS FOR POST “ARAB SPRING” REVOLUTION POLICIES
This paper highlights one of the first attempts in the empirical studies. It shall examine the sustainability of external adjustment policy using a quantitative approach. Using intertemporel and consistency approaches of...
IMPACT OF FINANCIAL LIBERALIZATION ON ECONOMIC GROWTH: A CASE STUDY OF PAKISTAN
We have tried to explore the link between financial liberalization index (FLI) and economic growth in Pakistan by using annual data for 1971- 2007. The Phillips Perron unit root test is utilized to verify the level of i...
OVERRΕACTION ANALYSIS IN STATE-OWNED EQUITIES
This paper challenges the research hypothesis that psychological factors and market sentiment can influence and alter the trajectory of state-owned equities. For this purpose, an overreaction analysis was performed in a...
ISLAMIC CULTURE IMPACT OF INCREASING SATISFACTION AND PERFORMANCE OF EMPLOYEES: STUDY OF EDUCATIONAL INSTITUTIONS SABILLILAH SAMPANG
Many studies conducted by experts who want to know the direct relationship between organizational cultures with organizational performance, but there are also some empirical studies which found that organizational cultur...