1. bookVolume 2 (2020): Issue 1 (December 2020)
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Testing the Feldstein Horioka puzzle in Algeria: Maki co-integratioan and hidden causality analysis

Published Online: 31 May 2021
Page range: 42 - 53
Journal Details
License
Format
Journal
First Published
20 Oct 2019
Publication timeframe
1 time per year
Languages
English
Abstract

The aim of this paper is to test the existence of Feldstein Horioka puzzle in the case of Algerian economy for the period 1970-2019 by examining the link between domestic savings and investments, we use in this paper both the co-integration tests under Gregory-Hansen (1996), Hatemi-J (2008) and Maki (2012) tests in the context of structural breaks, and the symmetric and asymmetric causality (hidden causality) proposed by Hacker-Hatemi (2010) and Hatemi (2012) respectively, the results suggest that there is a co-integration relationship between saving and investment with five endogenous structural breaks, and the saving retention coefficient is equal to 0.324 which means the existence of Feldstein-Horioka puzzle in a weaker form and high capital mobility, on the other hand, the results indicate asymmetric causal relationship between savings and investments.

Keywords

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