In 1980 Feldstein and Horioka (F-H) found high saving-investment cross-section correlation among OECD countries and interpreted this result as evidence of low capital mobility. Such a inconsistency between the conventional wisdom about capital mobility in the last decades and its empirical...

This paper develops a NATREX (NATural Real EXchange rate) model for two large economies, the Eurozone and the United States. The NATREX approach has already been adopted to explain the medium-long term dynamics of the real exchange rate in a number of industrial countries. So far, however, it...