50 years of capital mobility in the eurozone: breaking the Feldstein-Horioka puzzle
comunitat-uji-handle:10234/9
comunitat-uji-handle2:10234/8643
comunitat-uji-handle3:10234/8644
comunitat-uji-handle4:
INVESTIGACIONMetadata
Title
50 years of capital mobility in the eurozone: breaking the Feldstein-Horioka puzzleDate
2021-12-22Publisher
Springer NatureISSN
0923-7992; 1573-708XBibliographic citation
Camarero, M., Muñoz, A. & Tamarit, C. 50 Years of Capital Mobility in the Eurozone: Breaking the Feldstein-Horioka Puzzle. Open Econ Rev (2021)Type
info:eu-repo/semantics/articleVersion
info:eu-repo/semantics/publishedVersionSubject
Abstract
This paper assesses capital mobility for the Eurozone countries by studying the long-run relationship between domestic investment and savings for the period 1970-2019. Our main goal is to analyze the impact of economic ... [+]
This paper assesses capital mobility for the Eurozone countries by studying the long-run relationship between domestic investment and savings for the period 1970-2019. Our main goal is to analyze the impact of economic events on capital mobility during this period. We apply the cointegration methodology in a setting that allows us to identify endogenous breaks in the long-run saving-investment relationship. Precisely, the breaks coincide with relevant economic events. We find a downward trend in the saving-investment retention since the 70s for the so-called “core countries”, whereas this trend is not so evident in the peripheral, where the financial and sovereign crises have had a more substantial impact. In addition, our analysis captures other economic events: the Exchange Rate Mechanism (ERM) crisis, the German reunification, the European financial assistance program, and the post-crisis period. Our results also indicate that the original euro design had some flaws that remain unsolved. [-]
Is part of
Open Economies Review (2021)Funder Name
Spanish Ministry of Science, Innovation and Universities-AEI-FEDER | Generalitat Valenciana | European Commission
Project code
PID2020-114646RB-C42 / AEI 10.13039 / 501100011033 | PROMETEO 2018/102 | 611032-EPP-1-2019-1-ES-EPPJMO-CoE
Rights
info:eu-repo/semantics/openAccess
This item appears in the folowing collection(s)
- IEI_Articles [116]
- ECO_Articles [697]