Long term correlation in domestic saving and investment

Assignment Help International Economics
Reference no: EM1375094

Martin Feldstein and Charles Horioka of Harvard University discusses that in a world of perfect capital market integration, there should be little long term correlation in domestic saving and investment. Describe. What factors might explain closer than expected correlation observed?

Reference no: EM1375094

Questions Cloud

Effect of the global financial crisis : Determine the impact of global financial crisis of 2008-2009 on the economies of industrialised nations and emerging markets. Discuss what effect do problems like these have on attitudes towards free trade?
Reason of the decline of dollar against other currencies : The dollar has being weaker against other currencies ever since Bush administration took office. The government did nothing to stem the refuse. From the point of view of economic policy, what would you think was the cause?
Global financial contagion in future : The world economy retrenched in wake of a global financial crisis. Did globalization of capital markets contribute to this crisis? If so, what can be done to stop global financial contagion in future?
Show the benefits of international diversification : Suppose you are a fixed income fund manager based in euroland. Expected return of the EUR bond market is 4.4 percent and risk 5 percent, expected hedged return of the United Kingdom bond market 5.5% and risk 5.5 percent.
Long term correlation in domestic saving and investment : Martin Feldstein and Charles Horioka of Harvard University discusses that in a world of perfect capital market integration, there should be little long term correlation in domestic saving and investment.
Country net financial inflow and current account : Determine what has caused the United States run a merchandise trade deficit year after year since the early 1980 discuss the relationship between a country's net financial inflow and its current account?
Explain the importance of the competition : Our economy thrives on competition. Market forces will lead companies to manufacture the mix of goods most desired. Unforeseen events can be responded to in a rational manner.
Research in clinical lab testing : Your proposal to develop into 3-countries was approved by CEO. Now you have to make decision on a strategy - will PM firm simply sell its item or expand its markets via investment?
Determine the size of the national debt : Find the current state of the dollar versus other international currencies? What has been trend for the last six months and  Determine the size of the national debt?

Reviews

Write a Review

International Economics Questions & Answers

  Application of the theory of the second best to economics

"The theory of the second best leaves welfare economists 'high and dry' since not only does it abolish the established objectives of first-best situations,

  Effect of free trade on environment

Environmentalists discuss that the trade liberalization harms the environment. The decisions of World Trade Organization in particular have been the subject of much criticism.

  Determine the value of gdp

Use the table given below: Value in billions In each of following cases, indicate if GDP is affected, under what category and what happens to GDP.

  Explain the importance of the competition

Our economy thrives on competition. Market forces will lead companies to manufacture the mix of goods most desired. Unforeseen events can be responded to in a rational manner.

  Determine the value of the computer in the gdp

The given table lists the stages needed in the production of a personal computer. Determine the value of the computer in the GDP?

  Compute the herfindahl hirschman index before the merger

An industry consists of six companies, with sales of $500,000, $400,000, $300,000, $150,000, 75,000, and $60,000. Now, assume that the largest and smallest companies merge.

  Calculate the percentage change in index

The customer price index is a fixed weight index. It compares the price of fixed bundle of goods in 1-year with the value of the same bundle of goods in some base year.

  Concept of return versus risk

In two paragraphs, explain the idea of "return versus risk" and describe how you would use it in selecting a new investment portfolio. Describe how and why you used this idea when you chose your original two stocks.

  Determine major competitors in the wine market

Is there a certain protocol that United State companies must follow when advertising in Singapore? I understand that advertisements cannot contain any hype.

  Calculate the euro price of the dollar

When the Euro was 1st issued it hit the market at $1.17/€ on 1 Jan 2001. Calculate the Euro price of the dollar when the Euro debuted?

  Determine maximum profits

A monopolist with two plants operates with a marginal revenue of 500-4Q and marginal expenses of 4Q for plant one and 2Q for plant 2.

  Differences between microeconomics and macroeconomics

Microeconomics is suppose to be the study of scarce resources. Here, consumers [both individuals and organizations] must make allocation decisions. These 3-basic trade offs include which goods or services are to be manufactured,

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd