Trade costs, trade balances and current accounts an application of gravity to multilateral trade ; presented at CESifo area conference on macro, money & International finance, February 2005
In this paper we test the well-known hypothesis of Obstfeld and Rogoff (2000) that trade costs are the key to explaining the so-called Feldstein-Horioka puzzle. Using a gravity framework in an intertemporal context, we provide strong support for the hypothesis and we reconcile our results with the s...
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| Format: | UnknownFormat |
| Sprache: | eng |
| Veröffentlicht: |
Munich
CES
2005
Munich Ifo |
| Schriftenreihe: | CESifo working papers
1529 : Category 5, Fiscal policy, macroeconomics and growth |
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Tag hinzufügen | Zusammenfassung: | In this paper we test the well-known hypothesis of Obstfeld and Rogoff (2000) that trade costs are the key to explaining the so-called Feldstein-Horioka puzzle. Using a gravity framework in an intertemporal context, we provide strong support for the hypothesis and we reconcile our results with the so-called home bias puzzle. Interestingly, this requires a fundamental revision of Obstfeld and Rogoff’s argument. A further novelty of our work is in tying bilateral trade behavior to desired aggregate trade balances and desired intertemporal trade. |
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| Beschreibung: | Literaturverz. S. 25 - 27. - Auch im Internet unter den Adressen www.SSRN.com und www.CESifo-group.de verfügbar |
| Beschreibung: | 37 S. graph. Darst. 21 cm |