Measuring Capital Mobility: A Review of the Feldstein-Horioka Approach

Author(s)

Philip Agyei PEPRAH , Yao HONGXING , Geraude Fortune M. KOUNDE ,

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Volume 8 - April 2019 (04)

Abstract

In this paper, we present the approach of Feldstein-Horioka on the mobility of capital and analyze the developments that it has evoked over the years.  Though it was developed long ago, the F-H theory has remained very open to different critical approaches that have evolved since Karl Popper's non-naive methodological thinking: the criticism, in parallel with the attempts of consolidation ("immunization") of K Popper. Over the years, these consolidation efforts led this approach to incorporate new econometric methodologies and to partially change its purpose, taking into consideration some external sustainability and other recent factors.

Keywords

Feldstein-Horioka, Capital Mobility, Savings, Investment, External Constraints

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