Abstract
The Feldstein Horioka Puzzle has been a subject of extensive research, with various studies offering conflicting perspectives on its validity. The puzzle focuses on the relationship between saving and investment and whether the relationship holds true at the national level. The puzzle pertains to the persistent correlation between savings and investment, implying that countries with higher savings rates should also exhibit higher investment rates, in opposition to what conventional economic models predict. In the case of India, the Feldstein Horioka Puzzle has yielded diverse conclusions. Annual data from 1970 to 2021 has been used in the study to examine the validity of the Feldstein Horioka Puzzle in India. To confirm the long-term association between saving and investment, it is crucial to consider the cointegration test results. The results of the study KEYWORDS: Feldstein-Horioka Puzzle, saving, investment, fixed exchange rate, cointegration
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
More From: EPRA International Journal of Economic and Business Review
Disclaimer: 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.