Mangir, FatihErtugrul, Hasan Murat2020-03-262020-03-2620121300-610X1308-4658https://dx.doi.org/10.3484/iif.2012.317.3362https://hdl.handle.net/20.500.12395/28237Feldstein and Horioka (1980) examined the relationship between domestic saving-investment and capital movements assuming that while domestic investment is largely financed by domestic savings in closed economies with no international capital mobility, in open economies under perfect international capital mobility, domestic saving-investment correlations will be low However, result of their study reveals high correlation between investment and saving in 16 OECD industrialized countries implying low capital mobility. This result considered as Feldstein-Horioka Paradox (FH-P) in the literature. In this study, domestic saving and investment relationship for the Turkish economy have been investigated with FH model employing Bounds Test and Kalman filtering approach for 1998-2010 period. The Bounds Test results indicate long run relationship between domestic saving and investment. However, diminishing effects of saving over investment in the short run and results of Kalman filter indicates that there is capital mobility in Turkey.tr10.3484/iif.2012.317.3362info:eu-repo/semantics/closedAccessSaving-investmentCapital mobilityStructural breakFeldstein-Horioka puzzleARDL modelKalman filterArticle273176187WOS:000307600100003N/A