The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?

摘要: The central claim in this paper is that by explicitly introducing costs of international trade (narrowly, transport costs, but more broadly, tariffs, nontariff barriers, and other costs), one can go far toward explaining a great number the main empirical puzzles macroeconomists have struggled with over twenty-five years. Our approach elucidates J. McCallum's home-bias-in-trade puzzle, Feldstein-Horioka saving-investment French-Poterba equity-home-bias Backus-Kehoe-Kydland consumption-correlations puzzle. That simple alteration to an otherwise canonical macroeconomic model help substantially explain such broad range puzzles, including some previously seemed intractable, suggests rich area for future research. We also address variety pricing purchasing-power-parity puzzle emphasized Rogoff, what we term exchange-rate disconnect latter cat...