Research Discussion Paper – RDP 2007-10 Trade Costs and Some Puzzles in International Macroeconomics

Contents

• Introduction
• Method and Data
• Main Results
• Capital Controls
• Further Robustness Checks
• What Aspects of the Puzzles Do the Trade Costs Explain?
• Conclusions
• Appendix A: Notes on Data
• Appendix B: Plausibility of Alternative Trade-cost Measure
• References

This project began while I was a doctoral student at Princeton University. Harald Anderson from the International Monetary Fund generously provided data on capital restrictions. I appreciate comments and suggestions by Alan Blinder, Russell Hillberry, David Hummels, Jarkko Jääskelä, Christopher Kent, Marion Kohler, Glenn Otto and Esteban Rossi-Hansberg as well as seminar participants at the Australasian Macroeconomics Workshop and the Reserve Bank of Australia, while conceding that any errors are my own. The paper does not necessarily reflect the views of the Reserve Bank of Australia.