A survey of the Feldstein–Horioka puzzle: What has been done and where we stand

The objective of this paper is to present a survey of the research related to the Feldstein–Horioka puzzle and, in particular, to investigate what economists have learned, which parts of the puzzle have been resolved, which parts remain to be addressed, and where future research is heading. This paper is different from other attempts because it reviews the most recent literature and presents it according to the theoretical and/or empirical approach to the subject. Thus, it can be useful to academics and policy makers who are interested in understanding how and why savings and investment move the way they do.