TESTING THE FELDSTEIN-HORIOKA PUZZLE IN TRANSITION ECONOMIES

Tayfur Bayat, Selim Kayhan, Uğur Adıgüzel

Abstract


The relationship between savings and investments has become one of the most important issues discussed in economic theory with the interaction in financial markets. In this study, the relationship between savings and investments in the transition economies (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia, Romania, Bulgaria) from the central planning to the free market economy in the period 1995-2014 was analyzed by the panel data method. Breusch and Pagan (1980), Peseran (2004) and Peseran et al. (2008) tests showed cross-section dependence. Pesaran (2007) panel unit root test, panel cointegration test of Westerlund (2007) panel causality test and Emirmahmutoğlu and Köse (2011) panel causality test were performed with cross-section dependency. As a result of the empirical analysis, the result of Feldstein-Horioka puzzle for Bulgaria, Estonia, Lithuania and Poland is not valid.


Refbacks

  • There are currently no refbacks.


............................................................................................................................................................................................................................

HOW DO YOU REGISTER and SUBMIT AN ARTICLE?

Registering and Logging in

Submitting an Article