Do trade costs explain macroeconomic puzzles?

Research published by the Reserve Bank of Australia finds some evidence that trade costs do, at least in part, explain three monetary policy puzzles; the purchasing power parity real exchange rate persistence puzzle, the Feldstein-Horioka saving-investment puzzle and the international consumption correlation puzzle.

Data, the paper said, shows some evidence to support trade costs' role in explaining the puzzles, which Maurice Obstfeld and Kenneth Rogoff originally proposed in 2001. However, the

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@centralbanking.com or view our subscription options here: http://subscriptions.centralbanking.com/subscribe

You are currently unable to copy this content. Please contact info@centralbanking.com to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Central Banking? View our subscription options

Register for Central Banking

All fields are mandatory unless otherwise highlighted

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account

.