@techreport{Fazio2005Trade,
abstract = {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.},
author = {Giorgio Fazio and Ronald MacDonald and Jacques Melitz},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {F32; F10; 330; Feldstein-Horioka puzzle; trade costs; gravity model; home bias puzzle; current account; trade balance; Sparen; Investition; Internationale Kapitalmobilit\"{a}t; Au\ss{}enwirtschaft; Transaktionskosten; Transportkosten; Sch\"{a}tzung; Gravitationsmodell; Welt},
language = {eng},
number = {1529},
title = {Trade costs, trade balances and current accounts : an application of gravity to multilateral trade},
type = {CESifo working papers},
url = {http://hdl.handle.net/10419/18993},
year = {2005}
}
