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Adam Smith's answer to the Feldstein-Horioka Paradox: The invisible hand revisited

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  • Yasutomi, Ayumu
  • Horioka, Charles Yuji

Abstract

Adam Smith explained the Feldstein-Horioka Paradox, arguing that it is the pursuit of security that leads owners of capital to invest at home and that it is the pursuit of security, not profit, that leads them to promote the good of society.

Suggested Citation

  • Yasutomi, Ayumu & Horioka, Charles Yuji, 2011. "Adam Smith's answer to the Feldstein-Horioka Paradox: The invisible hand revisited," Economics Letters, Elsevier, vol. 110(1), pages 36-37, January.
    • Handle: RePEc:eee:ecolet:v:110:y:2011:i:1:p:36-37
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    References listed on IDEAS

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    1. Feldstein, Martin & Horioka, Charles, 1980. "Domestic Saving and International Capital Flows," Economic Journal, Royal Economic Society, vol. 90(358), pages 314-329, June.
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    1. Charles Yuji Horioka, 2024. "The Feldstein–Horioka Puzzle or Paradox after 44 years: a fallacy of composition," The Japanese Economic Review, Springer, vol. 75(3), pages 383-404, July.
    2. Younas, Javed, 2011. "De facto financial openness and capital mobility," Economics Letters, Elsevier, vol. 112(1), pages 60-62, July.

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