Testing the validity of the Feldstein-Horioka puzzle for Australia

Kumar, S. , Webber, D. J. and Fargher, S. (2012) Testing the validity of the Feldstein-Horioka puzzle for Australia. Applied Economics, 44 (5). pp. 599-605. ISSN 0003-6846

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Publisher's URL: http://dx.doi.org/10.1080/00036846.2010.511993

Abstract

This paper presents an investigation into the relationship between investment and savings in Australia over the period 1960-2007. Using five time series techniques our results reveal that the Feldstein-Horioka puzzle exists in a weak form with a lower saving retention coefficient. Granger Causality tests illustrate that savings Granger causes investment both in the short and long runs. Our results suggest Australia could effectively adopt policies that focus on increasing investment through increasing domestic savings

Item Type:	Article
Additional Information:	Available online before print: 4th February, 2011
Uncontrolled Keywords:	savings, investment, capital mobility
Faculty/Department:	Faculty of Business and Law > Department of Accounting, Economics and Finance ~Pre-2012 Faculty Structure > Faculty of Business and Law > Department of Accounting, Economics and Finance
ID Code:	15886
Deposited By:	Professor D. Webber
Deposited On:	01 Nov 2011 15:17
Last Modified:	02 Dec 2012 07:23