The ‘Real’ Explanation of the PPP Puzzle

Ford, Nicholas; Horioka, Yuji,  Charles

The ‘Real’ Explanation of the PPP Puzzle

Ford, Nicholas; Horioka, Yuji, Charles

Institute of Social and Economic Research Discussion Papers, 2016, 969, 1-5

アクセス数:387件（2026-02-16 10:10 集計）

固定URL: https://hdl.handle.net/11094/56975

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タイトル	The ‘Real’ Explanation of the PPP Puzzle
著者	著者名 Ford, Nicholas
著者	NRID 1000090173632 1000090173632 著者名 Horioka, Yuji, Charles
キーワード等	Exchange rate volatility
	Feldstein-Horioka paradox or puzzle
	financial market integration
	goods market integration
	international capital flows
	international capital mobility
	net transfers of capital
	PPP puzzle
	purchasing power parity puzzle
	real interest rate equalisation
	real interest rate parity
	saving-investment correlations
抄録	This article shows that global financial markets cannot, by themselves, achieve net transfers of financial capital and real interest rate equalisation across countries and that the integration of both global financial markets and global goods markets is needed to achieve net transfers of capital and real interest rate equalisation across countries. Thus, frictions (barriers to mobility) in one or both of these markets can impede the net transfer of capital between countries, produce the Feldstein and Horioka (1980) finding of high saving-investment correlations, and prevent real interest rates from being equalised across countries. Moreover, frictions in global goods markets can explain why real exchange rates deviate from PPP (purchasing power parity) for extended periods of time and can therefore also explain the PPP puzzle. Thus, we are able to resolve 2 of Obstfeld and Rogoff’s (2000) “6 major puzzles in macroeconomics” with essentially the same explanation.
出版者	The Institute of Social and Economic Research, Osaka University
収録物名	Institute of Social and Economic Research Discussion Papers
巻(号)	969
ページ	1-5
刊行年月	2016-04
言語	英語
ハンドルURL	https://hdl.handle.net/11094/56975
関連情報 (references)	URI https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2016/DP0969.pdf
アクセス権	metadata only access
カテゴリ	ディスカッション／ワーキング・ペーパー DP/WP
カテゴリ	Institute of Social and Economic Research Discussion Papers

資源タイプ	テクニカルレポート
ローカル資源タイプ	ディスカッション／ワーキング・ペーパー
DCMI資源タイプ	text
DCTERMS.bibliographicCitation	Institute of Social and Economic Research Discussion Papers. 2016, 969, p. 1-5
DC.title	The ‘Real’ Explanation of the PPP Puzzle
DC.creator	Ford, Nicholas
DC.creator	Horioka, Yuji, Charles
DC.publisher	The Institute of Social and Economic Research, Osaka University
DC.language' scheme='DCTERMS.RFC1766	英語
DC.type' scheme='DCTERMS.DCMIType	text
DCTERMS.issued' scheme='DCTERMS.W3CDTF	2016-04
DC.relation' scheme='DCTERMS.URI	https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2016/DP0969.pdf
DC.subject	Exchange rate volatility
	Feldstein-Horioka paradox or puzzle
	financial market integration
	goods market integration
	international capital flows
	international capital mobility
	net transfers of capital
	PPP puzzle
	purchasing power parity puzzle
	real interest rate equalisation
	real interest rate parity
	saving-investment correlations
DCTERMS.abstract	This article shows that global financial markets cannot, by themselves, achieve net transfers of financial capital and real interest rate equalisation across countries and that the integration of both global financial markets and global goods markets is needed to achieve net transfers of capital and real interest rate equalisation across countries. Thus, frictions (barriers to mobility) in one or both of these markets can impede the net transfer of capital between countries, produce the Feldstein and Horioka (1980) finding of high saving-investment correlations, and prevent real interest rates from being equalised across countries. Moreover, frictions in global goods markets can explain why real exchange rates deviate from PPP (purchasing power parity) for extended periods of time and can therefore also explain the PPP puzzle. Thus, we are able to resolve 2 of Obstfeld and Rogoff’s (2000) “6 major puzzles in macroeconomics” with essentially the same explanation.
DC.format	56975
citation_title	The ‘Real’ Explanation of the PPP Puzzle
citation_author	Ford, Nicholas
citation_author	Horioka, Yuji, Charles
citation_publisher	The Institute of Social and Economic Research, Osaka University
citation_language	英語
citation_date	2016-04
citation_journal_title	Institute of Social and Economic Research Discussion Papers
citation_volume	969
citation_firstpage	1
citation_lastpage	5
citation_public_url	https://hdl.handle.net/11094/56975
citation_abstract_html_url	https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2016/DP0969.pdf

The ‘Real’ Explanation of the PPP Puzzle

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