Puzzles in international economics and macroeconomics

.

Chapter 3 in Controversies in Economics and Finance, 2020, pp 48-72 from Edward Elgar Publishing

Abstract: Four alleged puzzles are examined: the home bias in trade puzzle, the home bias in equity portfolio puzzle, the Feldstein_Horioka puzzle, and the international consumption correlation puzzle. The home bias in trade puzzle is a puzzle because people in one country prefer to consume domestic goods and services. The home bias in equity portfolio puzzle is a puzzle because people do not invest in foreign stock markets to realise the benefits of international diversification. The Feldstein_Horioka puzzle is a puzzle because national saving and investment rates are highly correlated, implying low capital mobility. The international consumption correlation puzzle is a puzzle because consumption is much less correlated across countries than output. None of these puzzles is a puzzle, because simple and intuitive explanations can be presented for each and every one of them.

Keywords: Economics and Finance; Research Methods; Teaching Methods (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.elgaronline.com/view/9781839105616/chapter03.xhtml (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Temporarily Unavailable

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:19689_3

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Darrel McCalla ().