Autore
Hoffmann, Mathias

Titolo
Long run capital flows and the feldstein-horioka puzzle: A new measure of international capital mobility and some historical evidence from great britain and the United States
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1998 - Fascicolo: 30 - Pagina iniziale: 1 - Pagina finale: 35

In intertemporal optimization models of current account dynamics, the budget constraint will induce high degrees of positive comovement in the levels of savings and investment and the two variables are likely to be cointegrated. Error correction will then also influence the correlations of the cyclical components which are per se uninformative about capital mobility. As an alternative we suggest a new composite measure of the overall degree of long-run capital mobility based on Johansen's (1988) procedure. We apply our method to historical British and US data and find surprisingly high levels of long-run capital mobility throughout the century.



Testo completo: http://www.iue.it/ECO/WP-Texts/ECO98-30.pdf

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