The Feldstein-Horioka Puzzle or Paradox after 44 Years : A Fallacy of Composition

Horioka, Charles Yuji

The Feldstein-Horioka Puzzle or Paradox after 44 Years : A Fallacy of Composition

Horioka, Charles Yuji

Institute of Social and Economic Research Discussion Papers, 2024, 1231, 1-30

アクセス数:66件（2026-07-26 22:40 集計）

固定URL: https://hdl.handle.net/11094/94655

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タイトル	The Feldstein-Horioka Puzzle or Paradox after 44 Years : A Fallacy of Composition
著者	NRID 1000090173632 1000090173632 著者名 Horioka, Charles Yuji
キーワード等	Capital controls
	fallacy of composition
	Feldstein-Horioka Finding
	Feldstein-Horioka Puzzle or Paradox
	frictions in financial markets
	frictions in goods markets
	global interest rate
	globalization and liberalization of financial markets
	interest parity
	interest rate equalization
	international capital flows
	international capital mobility
	saving-investment correlations
	saving retention coefficient
	trade costs
	trade frictions
抄録	The finding of Feldstein and Horioka (1980) that domestic saving and domestic investment are highly correlated across countries despite the rapid globalization and liberalization of financial markets in recent decades has been regarded as a Puzzle or Paradox. However, in this paper, we show that countries as a whole may not be able to transfer their capital abroad and that the Feldstein-Horioka Finding of domestic saving and domestic investment being highly correlated across countries may arise even if there are no frictions in financial markets and even if individual investors can freely transfer their capital abroad if there are frictions in goods markets such as transport costs, tariffs, nontariff barriers, the cost of regulatory compliance, etc. In fact, there is evidence that frictions in goods markets are a more serious impediment to countries as a whole being able to transfer their capital abroad than frictions in financial markets, especially in the short run.
出版者	The Institute of Social and Economic Research, Osaka University
収録物名	Institute of Social and Economic Research Discussion Papers
巻(号)	1231
ページ	1-30
刊行年月	2024-02
言語	英語
ハンドルURL	https://hdl.handle.net/11094/94655
PISSN	0473453X
eISSN	24350982
関連情報 (references)	URI https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2024/DP1231.pdf
アクセス権	metadata only access
カテゴリ	ディスカッション／ワーキング・ペーパー DP/WP
カテゴリ	Institute of Social and Economic Research Discussion Papers

資源タイプ	テクニカルレポート
ローカル資源タイプ	ディスカッション／ワーキング・ペーパー
DCMI資源タイプ	text
DCTERMS.bibliographicCitation	Institute of Social and Economic Research Discussion Papers. 2024, 1231, p. 1-30
DC.title	The Feldstein-Horioka Puzzle or Paradox after 44 Years : A Fallacy of Composition
DC.creator	Horioka, Charles Yuji
DC.publisher	The Institute of Social and Economic Research, Osaka University
DC.language' scheme='DCTERMS.RFC1766	英語
DC.type' scheme='DCTERMS.DCMIType	text
DCTERMS.issued' scheme='DCTERMS.W3CDTF	2024-02
DC.relation' scheme='DCTERMS.URI	https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2024/DP1231.pdf
DC.subject	Capital controls
	fallacy of composition
	Feldstein-Horioka Finding
	Feldstein-Horioka Puzzle or Paradox
	frictions in financial markets
	frictions in goods markets
	global interest rate
	globalization and liberalization of financial markets
	interest parity
	interest rate equalization
	international capital flows
	international capital mobility
	saving-investment correlations
	saving retention coefficient
	trade costs
	trade frictions
DCTERMS.abstract	The finding of Feldstein and Horioka (1980) that domestic saving and domestic investment are highly correlated across countries despite the rapid globalization and liberalization of financial markets in recent decades has been regarded as a Puzzle or Paradox. However, in this paper, we show that countries as a whole may not be able to transfer their capital abroad and that the Feldstein-Horioka Finding of domestic saving and domestic investment being highly correlated across countries may arise even if there are no frictions in financial markets and even if individual investors can freely transfer their capital abroad if there are frictions in goods markets such as transport costs, tariffs, nontariff barriers, the cost of regulatory compliance, etc. In fact, there is evidence that frictions in goods markets are a more serious impediment to countries as a whole being able to transfer their capital abroad than frictions in financial markets, especially in the short run.
DC.format	94655
citation_title	The Feldstein-Horioka Puzzle or Paradox after 44 Years : A Fallacy of Composition
citation_author	Horioka, Charles Yuji
citation_publisher	The Institute of Social and Economic Research, Osaka University
citation_language	英語
citation_date	2024-02
citation_journal_title	Institute of Social and Economic Research Discussion Papers
citation_volume	1231
citation_firstpage	1
citation_lastpage	30
citation_public_url	https://hdl.handle.net/11094/94655
citation_abstract_html_url	https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2024/DP1231.pdf

The Feldstein-Horioka Puzzle or Paradox after 44 Years : A Fallacy of Composition

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