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Saving-investment Correlations in Response to Monetary Policy Shocks: New Insights into the Feldstein-Horioka Puzzle?

Schmidt, Caroline

In: Open Economies Review, 2007, vol. 18, no. 3, p. 347-367

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    Titre
    • Saving-investment Correlations in Response to Monetary Policy Shocks: New Insights into the Feldstein-Horioka Puzzle?
    Auteur
    • Schmidt, Caroline. KOF Swiss Economic Institute, ETH Zurich, 8092, Zurich, Switzerland
    Type de document
    • Postprint
    Langue
    • Anglais
    Publié dans
    • Open Economies Review, 2007, vol. 18, no. 3, p. 347-367. Kluwer Academic Publishers-Plenum Publishers; http://www.springer-ny.com
    Autre version électronique
    Identifiant OAI-PMH
    • oai:doc.rero.ch:318889
    Summary
    In this paper, it is argued that the observed high positive correlation between national savings and investment which is found in the data can in part be explained by shocks to monetary policy. This hypothesis, which is established by reviewing some empirical findings, is tested in a two-country DSGE-model framework in the tradition of the New Open Economy Macroeconomics. The simulation results obtained support the idea that shocks to monetary policy might contribute to the explanation of the Feldstein-Horioka puzzle