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Are saving and investment cointegrated?: An ARDL bounds testing approach

Research output: Contribution to Journal/MagazineJournal articlepeer-review

Published
<mark>Journal publication date</mark>31/10/2002
<mark>Journal</mark>Economics Letters
Issue number2
Volume77
Number of pages7
Pages (from-to)293-299
Publication StatusPublished
Early online date9/06/02
<mark>Original language</mark>English

Abstract

Using the newly developed ARDL bounds testing procedure, we find that, as implied by the intertemporal budget constraint, U.S. saving and investment rates cointegrate in all sample periods considered. Our results also show that the saving–investment correlation weakens after 1971, suggesting that the Feldstein–Horioka approach provides an at least partially informative measure of capital mobility.