Puzzles in international economics and macroeconomics

Four alleged puzzles are examined: the home bias in trade puzzle, the home bias in equity portfolio puzzle, the Feldstein_Horioka puzzle, and the international consumption correlation puzzle. The home bias in trade puzzle is a puzzle because people in one country prefer to consume domestic goods and services. The home bias in equity portfolio puzzle is a puzzle because people do not invest in foreign stock markets to realise the benefits of international diversification. The Feldstein_Horioka puzzle is a puzzle because national saving and investment rates are highly correlated, implying low capital mobility. The international consumption correlation puzzle is a puzzle because consumption is much less correlated across countries than output. None of these puzzles is a puzzle, because simple and intuitive explanations can be presented for each and every one of them.