The "Real" Explanation of the Feldstein-Horioka Puzzle / Nicholas Ford, Charles Yuji Horioka.

Format:

Book

Author/Creator:

Ford, Nicholas.

Contributor:

National Bureau of Economic Research.

Horioka, Charles Yuji.

Series:

Working Paper Series (National Bureau of Economic Research) no. w22081.

NBER working paper series no. w22081

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2016.

Summary:

This paper shows that global capital markets cannot, by themselves, achieve net transfers of financial capital between countries and that both the integration of global financial markets as well as the integration of global goods markets are needed to achieve net transfers of capital between countries. Frictions (barriers to mobility) in one or both of these markets can impede net transfers of capital between countries, produce the Feldstein and Horioka (1980) results, and prevent real interest rates from being equalized across countries. Moreover, there is empirical evidence that barriers to the mobility of goods and services are an important obstacle to international capital mobility.

Notes:

Print version record

March 2016.