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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/18993| Title: | Trade costs, trade balances and current accounts : an application of gravity to multilateral trade |
| Keywords: | F32 F10 ddc:330 Feldstein-Horioka puzzle trade costs gravity model home bias puzzle current account trade balance Sparen Investition Internationale Kapitalmobilität Außenwirtschaft Transaktionskosten Transportkosten Schätzung Gravitationsmodell Welt |
| Issue Date: | 16-Oct-2013 |
| Publisher: | |
| Description: | 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. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/18993 |
| Other Identifiers: | http://hdl.handle.net/10419/18993 ppn:500838127 |
| Appears in Collections: | EconStor |
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