Feldstein-Horioka paradox revisited

摘要: A central concern in the field of international finance is always capital mobility. Feldstein and Horioka (1980) propose a simple test for mobility obtain sign very low Their interesting result often described as Feldstein-Horioka paradox. This paper reexamines their study using panel data analysis. Following standard model selection procedure, preferred estimators elasticity domestic investment-GDP ratio on saving-GDP are significantly lower than one. In light our results, paradox turns out to be not so robust because cross country heterogeneities.