The global financial crisis and the European single market: The end of integration?

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Main author: Choudhry, Taufiq
Other authors: Kling, Gerhard
Jayasekera, Ranadeva
Format: Journal Article           
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id eprints-19029
recordtype eprints
institution SOAS, University of London
collection SOAS Research Online
language English
language_search English
description 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.
format Journal Article
author Choudhry, Taufiq
author_facet Choudhry, Taufiq
Kling, Gerhard
Jayasekera, Ranadeva
authorStr Choudhry, Taufiq
author_letter Choudhry, Taufiq
author2 Kling, Gerhard
Jayasekera, Ranadeva
author2Str Kling, Gerhard
Jayasekera, Ranadeva
title The global financial crisis and the European single market: The end of integration?
publisher Elsevier
publishDate 2014
url https://eprints.soas.ac.uk/19029/

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