Theoretical and Applied Economics
No. 2 / 2016 (607), Summer
Testing the validity of the Feldstein-Horioka Puzzle: New evidence from structural breaks for Turkey
Erciyes University, Turkey
Ahmet KOSEOGLU
Erciyes University, Turkey
Ali Gokhan YUCEL
Erciyes University, Turkey
Abstract. The purpose of this study is to test the validity of Feldstein-Horioka Puzzle using time series data covering the period of 1960-2014 for Turkey. In order to test this relationship, the recently proposed multiple-break cointegration test of Maki (2012) was employed. After detecting the existence of a cointegration between domestic saving by allowing for endogenous structural breaks, Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) estimation procedures are used to obtain long run coefficients. The empirical results indicate that the saving retention coefficient is equal to 0,377 and 0,406 in the DOLS and FMOLS for Turkish economy, respectively. These results imply relatively high capital mobility in Turkey.
Keywords: Feldstein-Horioka Puzzle; Savings and Investments; Cointegration; Structural Breaks; Capital Mobility.
Download the full article: 
Contents
- The prerequisites of social development when planning for decentralization
Cătălin Daniel DUMITRICĂ
Teodora I. BIŢOIU
Dragoş DINCĂ
- Testing the validity of the Feldstein-Horioka Puzzle:
New evidence from structural breaks for Turkey
Ekrem ERDEM
Ahmet KOSEOGLU
Ali Gokhan YUCEL
- The role of institutional pressures in developing countries. Implications for IFRS
Cătălina Florentina PRICOPE
- Children’s health insurance coverage in the United States:
The role of parents’ ethnicity and immigration status
Swarn CHATTERJEE
- An empirical investigation of banking sector development
and economic growth in a panel of selected SAARC countries
Javed AHMED
Malik Fahim BASHIR
- A common agency within bureaucracy
Nadide Banu OLCAY
- From public services to networks of social enterprises.
Strategic trends for South-Eastern Europe
Ani MATEI
Carmen SĂVULESCU
Corina-Georgiana ANTONOVICI
- The relationship between inclusive growth,
inequality and poverty in Africa
Mohamed BEN AMAR
Nahed ZGHIDI
- Bankruptcy prediction based on the debt ratio
Daniel BRÎNDESCU-OLARIU
- The effects of saving-investment gap
on economic growth in developing countries:
A clustering and panel data analysis
Ismet GOCER
Tugba AKIN
Sedat ALATAS
- Impact of educational expenditure on economic growth
in major Asian countries: Evidence from econometric analysis
Lingaraj MALLICK
Pradeep Kumar DAS
Kalandi Charan PRADHAN
- Developing a financial inclusion index
and inclusive growth in India
Susanta Kumar SETHY
- Examining the determinants of FDI inflows in India
Shiba Shankar PATTAYAT
- A review of corruption based on the social and economic
evolution of Ancient Greece and Ancient Rome
Ciprian ROTARU
Dumitru-Alexandru BOD
Raluca GEORGESCU
- Estimating the exchange rate in the context of Romania's
integration in the Eurozone
Laura Mădălina PÎRŞCOVEANU
