The International Diversification Puzzle Is Not As Bad As You Think
---- Acknowledgements ----
The views expressed herein are those of the authors and no necessarily those of the Federal Reserve Board, the Federal Reserve Bank of Minneapolis, or the Federal Reserve System. We thank Sebnem Kalemli-Ozcan, Nobu Kiyotaki and Eric Van Wincoop for thoughtful discussions and seminar participants at the Board of Governors, Bocconi, Bank of Canada, Boston College, Chicago, Cornell, Federal Reserve Banks of Chicago, Cleveland, Dallas, San Francisco and Richmond, European University Institute, Georgetown, Harvard, IMF, LSE, MIT, NYU, Penn, Princeton, Stanford, SUNY Albany, Texas Austin, UC San Diego and Berkeley, USC, Virginia, Wisconsin, the 2004 AEA Meetings, CEPR ESSIM, SED, Minnesota Workshop in Macroeconomics Theory and NBER EFG summer meetings for very helpful comments. The datasets and computer code used in the paper are available on our websites. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.