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Feldstein and Horioka (1980) argued that the correlation of saving and investment in a cross-section of countries may … investment should be cointegrated over time. Simulations show that the cross-section regressions used in the literature will …
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, which is that even though global financial markets appear to be integrated, levels of saving and investment are correlated …
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What does the saving-investment (SI) relation really measure and how should the SI relation be measured? These are two …
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view (i.e., including human capital) of investment and saving. We find that the Feldstein-Horioka result is impervious to …
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