Perfect capital mobility has been formulated as a saving-investment comovement in each country which is statistically insignificant from zero; thus, the low correlation has been interpreted as evidence that the domestic capital market is not internationally mobile. However, this argument may be...

International capital mobility in Taiwan is tested by estimating the regime-switching investment-saving correlation. A Markov-switching model is applied which allows the samples to be drawn from two different regimes; high mobility and low mobility. Empirical results are investigated and...