Revisiting the Feldstein-Horioka puzzle for Turkey

5Citations
Citations of this article
9Readers
Mendeley users who have this article in their library.

This article is free to access.

Abstract

The domestic saving and investment correlation as posited by Feldstein and Horioka is revisited for Turkey and tested over the whole period (1950–2017) and the two subperiods (1950–1989 and 1990–2017). The time-series properties of the data and the presence of structural breaks are properly addressed by the bounds testing procedure. Although, the investment and savings are positively correlated during the period of restricted capital mobility (1950–1989) and negatively correlated during the period of perfect capital mobility (1990–2017) according to the joint F-test on the significance of the coefficients, the long-run elasticity of investment with respect to savings ratio is significant for the whole period and for the first sub-period. The results confirm the Feldstein and Horioka hypothesis in a closed economy. However, the high, negative and insignificant long-run elasticity and non-constant coefficients in the second sub-period necessitate a full-investment model.

Cite

CITATION STYLE

APA

Akkoyunlu, Ş. (2020). Revisiting the Feldstein-Horioka puzzle for Turkey. Journal of Applied Economics, 23(1), 129–148. https://doi.org/10.1080/15140326.2020.1711592

Register to see more suggestions

Mendeley helps you to discover research relevant for your work.

Already have an account?

Save time finding and organizing research with Mendeley

Sign up for free