344:
93:(1996) reports average correlation of OECD countries with world consumption (35 “benchmark” countries) of .43, whereas the average OECD country’s output correlation with world benchmark is 0.52. The really puzzling part of these results is not that consumption levels are not perfectly correlated, but that they are less correlated than output. Apparently, there is hardly any risk sharing.
128:(1995) suggests two means of breaking the link between prices and quantities and making it hard for households to smooth consumption by trade. The first is nontraded goods: Suppose households like to consume goods that cannot be traded, like some services. If there is a positive technology shock raising their supply, they can’t
132:
of these goods by exporting them abroad. The second is "taste shocks": If consumption rises in one country without any change in the economic environment, it will borrow abroad, driving up the interest rate and inducing the foreign country to cut back on its consumption. So consumption could be
66:, country-specific output risks should be pooled and domestic consumption growth should not depend heavily on country-specific income shocks. So according to theory we should observe that consumption is much more correlated across countries than output. What
85:
consumption and output for 11 advanced countries relative to the US. The measured average consumption correlation was .19, whereas the average output correlation was .31.
249:
Obstfeld, Maurice; Rogoff, Kenneth (2000), "The Six Major
Puzzles in International Macroeconomics: Is There a Common Cause?", in Bernanke, Ben; Rogoff, Kenneth (eds.),
71:
385:
17:
78:
found in their article from 1992 was the opposite, namely that consumption is much less correlated across countries than output.
409:
258:
234:
206:
96:
Obstfeld and Rogoff (2000) identifies this as one of the six major puzzles in international economics. The others are the
193:
Backus, David K.; Kehoe, Patrick J.; Kydland, Finn E. (1995), "International
Business Cycles: Theory and Evidence", in
378:
359:
310:(1995), "Tastes and Technology in a Two-Country Model of the Business Cycle: Explaining International Comovements",
404:
419:
371:
159:
274:
82:
109:
414:
97:
312:
105:
101:
39:
112:, and the Baxter-Stockman neutrality of exchange rate regime puzzle. It is also related to the
59:
129:
8:
113:
321:
223:
176:
47:
293:
254:
230:
202:
180:
289:
194:
168:
86:
151:
67:
63:
275:"Consumption and real exchange rates in dynamic economies with non-traded goods"
355:
351:
90:
398:
75:
307:
125:
43:
325:
343:
172:
119:
81:
Backus, Kehoe, and
Kydland (1992) calculate the correlation of
150:
Backus, David K.; Kehoe, Patrick J.; Kydland, Finn E. (1992),
110:
the purchasing power and exchange rate disconnect puzzle
106:
Feldstein-Horioka savings-investment correlations puzzle
186:
143:
32:
Backus–Kehoe–Kydland consumption correlation puzzle
222:
192:
149:
114:Backus-Smith consumption-real exchange rate puzzle
253:, vol. 15, The MIT Press, pp. 339–390,
242:
214:
396:
299:
248:
220:
379:
305:
120:Attempts to account for the perceived anomaly
266:
273:Backus, David K.; Smith, Gregor W. (1993),
272:
225:Foundations of International Macroeconomics
221:Obstfeld, Maurice; Rogoff, Kenneth (1996),
386:
372:
133:negatively correlated across countries.
64:complete set of state-contingent markets
14:
397:
338:
199:Frontiers of Business Cycle Research
152:"International Real Business Cycles"
24:
282:Journal of International Economics
25:
431:
342:
251:NBER Macroeconomics Annual 2000
201:, Princeton University Press,
13:
1:
136:
410:International macroeconomics
358:. You can help Knowledge by
294:10.1016/0022-1996(93)90021-O
160:Journal of Political Economy
53:
7:
18:Backus-Kehoe-Kydland puzzle
10:
436:
337:
38:, is the observation that
98:home bias in trade puzzle
62:, i.e. an economy with a
350:This article related to
313:American Economic Review
130:smooth their consumption
102:equity home bias puzzle
46:across countries than
405:International finance
420:Macroeconomics stubs
60:Arrow–Debreu economy
34:, also known as the
306:Stockman, Alan C.;
30:In economics, the
367:
366:
260:978-0-262-02503-4
236:978-0-262-15047-7
229:, The MIT Press,
208:978-0-691-04323-4
16:(Redirected from
427:
415:Economic puzzles
388:
381:
374:
346:
339:
329:
328:
303:
297:
296:
288:(3–4): 297–316,
279:
270:
264:
263:
246:
240:
239:
228:
218:
212:
211:
190:
184:
183:
156:
147:
27:Economics puzzle
21:
435:
434:
430:
429:
428:
426:
425:
424:
395:
394:
393:
392:
335:
333:
332:
308:Tesar, Linda L.
304:
300:
277:
271:
267:
261:
247:
243:
237:
219:
215:
209:
191:
187:
154:
148:
144:
139:
122:
56:
28:
23:
22:
15:
12:
11:
5:
433:
423:
422:
417:
412:
407:
391:
390:
383:
376:
368:
365:
364:
352:macroeconomics
347:
331:
330:
320:(1): 168–185,
298:
265:
259:
241:
235:
213:
207:
185:
173:10.1086/261838
167:(4): 745–775,
141:
140:
138:
135:
121:
118:
55:
52:
26:
9:
6:
4:
3:
2:
432:
421:
418:
416:
413:
411:
408:
406:
403:
402:
400:
389:
384:
382:
377:
375:
370:
369:
363:
361:
357:
353:
348:
345:
341:
340:
336:
327:
323:
319:
315:
314:
309:
302:
295:
291:
287:
283:
276:
269:
262:
256:
252:
245:
238:
232:
227:
226:
217:
210:
204:
200:
196:
189:
182:
178:
174:
170:
166:
162:
161:
153:
146:
142:
134:
131:
127:
124:Stockman and
117:
115:
111:
107:
103:
99:
94:
92:
88:
84:
79:
77:
73:
69:
65:
61:
51:
49:
45:
42:is much less
41:
37:
33:
19:
360:expanding it
349:
334:
317:
311:
301:
285:
281:
268:
250:
244:
224:
216:
198:
188:
164:
158:
145:
123:
95:
80:
57:
35:
31:
29:
195:Cooley, Tom
83:HP-filtered
40:consumption
399:Categories
137:References
44:correlated
36:BKK puzzle
54:Statement
181:55482662
87:Obstfeld
326:2118002
197:(ed.),
76:Kydland
324:
257:
233:
205:
179:
104:, the
100:, the
91:Rogoff
68:Backus
58:In an
48:output
354:is a
322:JSTOR
278:(PDF)
177:S2CID
155:(PDF)
126:Tesar
72:Kehoe
356:stub
255:ISBN
231:ISBN
203:ISBN
89:and
74:and
290:doi
169:doi
165:100
401::
318:85
316:,
286:35
284:,
280:,
175:,
163:,
157:,
116:.
108:,
70:,
50:.
387:e
380:t
373:v
362:.
292::
171::
20:)
Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.