Capital mobility and global factor shocks

This paper focuses on the effects of global factors on the saving–investment relationship. We prove that, if investments and savings are affected by idiosyncratic and global components, they must be cointegrated to obtain reliable estimates of the saving-retention coefficient. When global shocks are taken into account through common factors, we find that the estimated saving-retention coefficient is close to zero for a panel of 21 OECD countries.

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Year of publication:	2013
Authors:	Costantini, Mauro ; Gutierrez, Luciano
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 120.2013, 3, p. 513-515
Publisher:	Elsevier
Subject:	Saving \| Investment \| Capital mobility \| Panel cointegration

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Type of publication:	Article
Classification:	C31 - Cross-Sectional Models; Spatial Models ; C33 - Models with Panel Data ; F32 - Current Account Adjustment; Short-Term Capital Movements ; F41 - Open Economy Macroeconomics
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010681763