We extend Dornbusch's (1973) model to determine whether the countercyclical trade balance which is often observed in real business cycle studies can be rationalized and show that the sum of export and import elasticities being less than one is responsible for the complex fluctuation of exchange rates within this exogenous-shock-free framework. Copyright Kluwer Academic Publishers 1997
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Volume (Year): 8 (1997) Issue (Month): 4 (October) Pages: 393-401 Download reference. The following formats are available: HTML
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Benhabib, Jess & Nishimura, Kazuo, 1989.
"Stochastic Equilibrium Oscillations,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(1), pages 85-102, February.
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