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Chor Foon Tang and Hooi Hooi Lean
''Revisit Feldstein-Horioka puzzle: evidence from Malaysia''
( 2011, Vol. 31 No.3 )
The aim of this study is to re-visit the Feldstein and Horioka (1980) puzzle for Malaysia. The conventional bounds testing approach cannot show any evidence of cointegration between savings and investment. However, the result of our proposed rolling bounds test approach shows that the cointegrated relationship varied over time. In particular, the variables are cointegrated only prior to the Asian financial crisis and the Ringgit pegged regime in 1997/98.
Keywords: Malaysia, Rolling cointegration test, Savings-investment nexus
JEL: C1 - Econometric and Statistical Methods: General
E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
Manuscript Received : May 21 2010 Manuscript Accepted : Aug 05 2011

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