Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92644
Authors: 
Yasutomi, Ayumu
Horioka, Charles Yuji
Year of Publication: 
2010
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 778
Abstract: 
In this paper, we show that Adam Smith pointed out the existence of the Feldstein-Horioka Paradox or Puzzle and even gave an explanation for it more than 200 years before the publication of Feldstein and Horioka (1980). Smith argues that it is the pursuit of their own security that leads owners of capital to invest their capital in their own country to as great an extent as possible and that it is the pursuit of security rather than the pursuit of profit that leads individuals to promote the good of society as a whole via the 'invisible hand.'
Subjects: 
Feldstein-Horioka paradox
Feldstein-Horioka puzzle
capital mobility
capital flows
saving
investment
Adam Smith
invisible hand
JEL: 
B12
F21
F32
Document Type: 
Working Paper

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