stockman and tesar (1995) suggests two means of breaking the link between prices and quantities and making it hard for households to smooth consumption by trade. the first is nontraded goods: suppose households like to consume goods that cannot be traded, like some services. if there is a positive technology shock raising their supply, they can’t smooth their consumption of these goods by exporting them abroad. the second is "taste shocks": if consumption rises in one country without any change in the economic environment, it will borrow abroad, driving up the interest rate and inducing the foreign country to cut back on its consumption. so consumption could be negatively correlated across countries.