FELDSTEIN-HORIOKA PUZZLE: BRIC COUNTRIES EXAMPLES

Year 2018, Volume: 2 Issue: 1, 39 - 50, 04.07.2018

Kemalettin Tanrıseven , Lütfi Bicimveren

Abstract

In this study four countries which are named BRIC (Brazil, Russia, India, China) relation was examined between savings to GDP and investments to GDP. Previous studies have discussed investment and saving relationships. The Feldstein-Horioka study concludes that the correlation between savings and investment is large and that there is low capital mobility. In globalizing economies capital mobility is increasing. Therefore, according to the obtained data, it will be tried to determine saving and investment amounts in GDP ratio of these countries. The study results support the Feldstein-Horioka Puzzle. A long run positive and significant relationship between savings and investment has been identified. 

Keywords

Investment, Savings, Feldstein-Horioka Puzzle, BRIC

FELDSTEIN-HORIOKA PUZZLE FOR BRIC COUNTRIES

Abstract

In this study four countries which are named BRIC (Brazil, Russia, India, China) relation was examined between savings to GDP and investments to GDP. Previous studies have discussed investment and saving relationships. The Feldstein-Horioka study concludes that the correlation between savings and investment is large and that there is low capital mobility. In globalizing economies capital mobility is increasing. Therefore, according to the obtained data, it will be tried to determine saving and investment amounts in GDP ratio of these countries. The study results support the Feldstein-Horioka Puzzle. A long run positive and significant relationship between savings and investment has been identified.

Keywords

Investment, Savings, Feldstein-Horioka Puzzle

References

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