This article analyzes some of the potential effects of increased international financial integration within a simple two-country model. In the model, the article considers a switch in the menu of internationally traded financial securities from bonds to complete contingent claims and examines the impact of this switch on the stochastic properties, including the cross-country correlations, of standard macroeconomic aggregates like output, consumption, and labor effort, as well as the trade balance.
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Article provided by Federal Reserve Bank of Minneapolis in its journal Quarterly Review.
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
Alejandro Cuñat & Marco Maffezzoli, .
"Heckscher-Ohlin Business Cycles,"
Working Papers
210, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
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