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

Mark J. Holmes, Jesús Otero

Resultado de la investigación: Contribución a RevistaArtículo

5 Citas (Scopus)

Resumen

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.
Idioma originalEnglish (US)
Páginas (desde-hasta)1-11
Número de páginas11
PublicaciónInternational Review of Economics and Finance
DOI
EstadoPublished - ene 1 2014

Huella dactilar

Heterogeneous panels
Feldstein-Horioka
Capital mobility
Estimator
OECD countries
Endogeneity
Cross-sectional dependence
International capital mobility
Feldstein-Horioka puzzle

Citar esto

@article{d4a7276fdb0f499d92b1ebd6b68e6de9,
title = "Re-examining the Feldstein-Horioka and Sachs' views of capital mobility: A heterogeneous panel setup",
abstract = "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. {\circledC} 2014 Elsevier Inc.",
author = "Holmes, {Mark J.} and Jes{\'u}s Otero",
year = "2014",
month = "1",
day = "1",
doi = "10.1016/j.iref.2014.03.002",
language = "English (US)",
pages = "1--11",
journal = "International Review of Economics and Finance",
issn = "1059-0560",
publisher = "Elsevier Inc.",

}

Re-examining the Feldstein-Horioka and Sachs' views of capital mobility: A heterogeneous panel setup. / Holmes, Mark J.; Otero, Jesús.

En: International Review of Economics and Finance, 01.01.2014, p. 1-11.

Resultado de la investigación: Contribución a RevistaArtículo

TY - JOUR

T1 - Re-examining the Feldstein-Horioka and Sachs' views of capital mobility: A heterogeneous panel setup

AU - Holmes, Mark J.

AU - Otero, Jesús

PY - 2014/1/1

Y1 - 2014/1/1

N2 - 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.

AB - 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.

U2 - 10.1016/j.iref.2014.03.002

DO - 10.1016/j.iref.2014.03.002

M3 - Article

SP - 1

EP - 11

JO - International Review of Economics and Finance

JF - International Review of Economics and Finance

SN - 1059-0560

ER -