Abstract
ABSTRACT In view of the Feldstein–Horioka (1980) puzzle, this study examines the relationship between the investment rate and the saving rate using annual data from Norway for 1830 to 2017. The nonlinear version of the autoregressive distributed lag (ARDL) cointegration methodology developed by Shin (2014), based on the linear ARDL bounds cointegration testing approach of Pesaran et al. (2001), is implemented. The findings show that there is a long-term cointegration relationship between the saving rate and investment rate. The nonlinear ARDL model indicates that there are short-run but no long-run asymmetric effects. It is concluded that Norway respects its intertemporal budget constraint and that international capital mobility is high.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
