PUBLICATIONS & REPORTS
PUBLICATIONS & REPORTS
From Kitakyushu to the world: AGI, a research institute that studies Asia's economy and society
International Capital Mobility under the Variable Real Interest Rate： Reassessment of Feldstein-Horioka Puzzle
| Author | Kazuhiko Yokota |
|---|---|
| Date of Publication | 2005. 12 |
| No. | 2005-33 |
| Download | 827KB |
Contents Introduction
This paper examines empirically the international capital mobility for several countries. The novelty of this paper is to develop a theory-based estimation method under the assumption of a variable real interest rate. Since the real interest rates are variable over both countries and time in the real world, it is more appropriate to assume that capital is sensitive to the real interest rate difference. The empirical results show that Singapore is a free capital mobile economy while India is a capital immobile economy.