Abstract
In this paper, the recently developed panel unit root and the Pedroni cointegration tests are applied to empirically examine the validity of the Feldstein-Horioka puzzle (F-H puzzle) for a heterogeneous panel of 14 Latin American and five Caribbean countries over the period, 1960-2002. The findings indicate that in these countries, the long-run solvency condition is maintained. Finally, employing the Pedroni panel group FM-OLS estimator (2000, 2001), it is found that the statistically significant estimated savings-retention coefficient for the panel is relatively small indicating that the F-H Puzzle is not valid and thus implying the prevalence of a moderate degree of capital mobility.
| Original language | English |
|---|---|
| Pages (from-to) | 176-188 |
| Number of pages | 13 |
| Journal | Journal of Economics and Finance |
| Volume | 33 |
| Issue number | 2 |
| DOIs | |
| State | Published - 2009 |
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All Science Journal Classification (ASJC) codes
- Economics and Econometrics
- Finance
Cite this
The Feldstein-Horioka puzzle in Latin American and Caribbean countries : A panel cointegration analysis. / Murthy, Vasudeva N. R.
In: Journal of Economics and Finance, Vol. 33, No. 2, 2009, p. 176-188.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - The Feldstein-Horioka puzzle in Latin American and Caribbean countries
T2 - A panel cointegration analysis
AU - Murthy, Vasudeva N. R.
PY - 2009
Y1 - 2009
N2 - In this paper, the recently developed panel unit root and the Pedroni cointegration tests are applied to empirically examine the validity of the Feldstein-Horioka puzzle (F-H puzzle) for a heterogeneous panel of 14 Latin American and five Caribbean countries over the period, 1960-2002. The findings indicate that in these countries, the long-run solvency condition is maintained. Finally, employing the Pedroni panel group FM-OLS estimator (2000, 2001), it is found that the statistically significant estimated savings-retention coefficient for the panel is relatively small indicating that the F-H Puzzle is not valid and thus implying the prevalence of a moderate degree of capital mobility.
AB - In this paper, the recently developed panel unit root and the Pedroni cointegration tests are applied to empirically examine the validity of the Feldstein-Horioka puzzle (F-H puzzle) for a heterogeneous panel of 14 Latin American and five Caribbean countries over the period, 1960-2002. The findings indicate that in these countries, the long-run solvency condition is maintained. Finally, employing the Pedroni panel group FM-OLS estimator (2000, 2001), it is found that the statistically significant estimated savings-retention coefficient for the panel is relatively small indicating that the F-H Puzzle is not valid and thus implying the prevalence of a moderate degree of capital mobility.
UR - http://www.scopus.com/inward/record.url?scp=65249087946&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=65249087946&partnerID=8YFLogxK
U2 - 10.1007/s12197-008-9051-5
DO - 10.1007/s12197-008-9051-5
M3 - Article
VL - 33
SP - 176
EP - 188
JO - Journal of Economics and Finance
JF - Journal of Economics and Finance
SN - 1055-0925
IS - 2
ER -