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The saving and investment nexus for China : evidence from cointegration tests

journal contribution
posted on 2005-01-01, 00:00 authored by Paresh Narayan
The saving and investment nexus as postulated by Feldstein and Horioka (FH) (1980) is revisited. The saving investment correlation for China is estimated over the periods 1952-1998 and 1952-1994, the latter culminating in a period of fixed exchange rate regime. Amongst the key results, it is found that saving and investment are correlated for China for both the period of the fixed exchange rate and the entire sample period. With high saving-investment correlation, the results suggest that the Chinese economy is in conformity with the FH hypothesis. This is a valid outcome, for in China capital mobility was fairly restricted over the 1952-1994 period as indicated by the relatively low foreign direct investment.

History

Journal

Applied economics

Volume

37

Issue

17

Pagination

1979 - 1990

Publisher

Routledge

Location

London, England

ISSN

0003-6846

eISSN

1466-4283

Language

eng

Publication classification

C1.1 Refereed article in a scholarly journal

Copyright notice

2005, Taylor and Francis

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