TY - JOUR
T1 - The global financial crisis and the European single market
T2 - The end of integration?
AU - Choudhry, Taufiq
AU - Kling, Gerhard
AU - Jayasekera, Ranadeva
N1 - Acknowledgements
We also would like to thank the Money Macro and Finance Research Group for their support in organising this conference. We are very pleased and grateful that Professor James Lothian (Fordham University, USA) delivered the keynote speech, and Professor Charles Goodhart (London Business School) presented the lunch time seminar. We are very grateful to our sponsors, the Journal of Inter-national Money and Finance, the Money Macro and Finance Research Group, the Bank of England, Bloomberg and the School of Management,University of Southampton.
PY - 2014/11
Y1 - 2014/11
N2 - Using various versions of the Feldstein-Horioka (FH) coefficient, we measure the time-varying degree of capital mobility and economic integration in the European Union. Prior research shows high correlation between domestic investment and savings implying low capital mobility. This surprising result has led to subsequent research on the ?Feldstein-Horioka puzzle?. Our empirical findings show that the puzzle is less puzzling with a coefficient of 0.52 in the period 1990-1995 in EU countries approaching its minimum value of 0.02 in the period 2003-2008. This clearly indicates that the FH coefficient is time-varying signalling a deepening of economic integration in the European Union. Yet, with the advent of the Global Financial Crisis the FH coefficient has increased to 0.26 underlining worrying signs of disintegration.
AB - Using various versions of the Feldstein-Horioka (FH) coefficient, we measure the time-varying degree of capital mobility and economic integration in the European Union. Prior research shows high correlation between domestic investment and savings implying low capital mobility. This surprising result has led to subsequent research on the ?Feldstein-Horioka puzzle?. Our empirical findings show that the puzzle is less puzzling with a coefficient of 0.52 in the period 1990-1995 in EU countries approaching its minimum value of 0.02 in the period 2003-2008. This clearly indicates that the FH coefficient is time-varying signalling a deepening of economic integration in the European Union. Yet, with the advent of the Global Financial Crisis the FH coefficient has increased to 0.26 underlining worrying signs of disintegration.
U2 - 10.1016/j.jimonfin.2014.08.002
DO - 10.1016/j.jimonfin.2014.08.002
M3 - Article
VL - 49
SP - 191
EP - 196
JO - Journal of International Money and Finance
JF - Journal of International Money and Finance
SN - 0261-5606
IS - Part B
ER -