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Human Capital and International Real Business Cycles

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  • Marco Maffezzoli

    (Istituto di Economia Politica, Università Bocconi)

Abstract

Standard international real business cycle models are generally unable to replicate the observed comovements of all the main aggregate variables: in particular, they generate low or negative international comovements in output, investment, and labour. I simulated a two-country, two-sector stochastic endogenous growth model that embodies an externality linking human capital across countries. This model is able to reproduce positive international correlations for all the main variables, and is partially able to reproduce their ranking. These results are robust to changes in the entire set of parameters, as shown in a global sensitivity analysis performed by applying Canova's methodology. (Copyright: Elsevier)

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File URL: http://dx.doi.org/10.1006/redy.1999.0059
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Bibliographic Info

Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

Volume (Year): 3 (2000)
Issue (Month): 1 ()
Pages: 137-165

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Handle: RePEc:red:issued:v:3:y:2000:i:1:p:137-165

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Keywords: stochastic growth models; international comovements; investment comovements; human capital; knowledge spillovers;

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References

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Citations

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Cited by:
  1. Sharon Harrison & Jang-Ting Guo, 2008. "Indeterminacy with No-Income-Effect Preferences and Sector-Specifc Externalities," Working Papers, Barnard College, Department of Economics 0801, Barnard College, Department of Economics.
  2. Matheron, Julien, 2003. "Is growth useful in RBC models?," Economic Modelling, Elsevier, Elsevier, vol. 20(3), pages 605-622, May.
  3. Cuñat, Alejandro & Maffezzoli, Marco, 2002. "Heckscher-Ohlin Business Cycles," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3382, C.E.P.R. Discussion Papers.
  4. Pakko Michael R., 2003. "Substitution Elasticities and Investment Dynamics in Two-Country Business Cycle Models," The B.E. Journal of Macroeconomics, De Gruyter, De Gruyter, vol. 3(1), pages 1-20, November.
  5. Boileau, Martin, 2002. "Trade in capital goods and investment-specific technical change," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 26(6), pages 963-984, June.
  6. Max Gillman, 2013. "Lost in Translation: Unified Consumption Theory, Dynamic AS-AD, and Business Cycles," IEHAS Discussion Papers, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences 1305, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  7. Michael R. Pakko, 2004. "A spectral analysis of the cross-country consumption correlation puzzle," Working Papers, Federal Reserve Bank of St. Louis 2003-023, Federal Reserve Bank of St. Louis.
  8. Parantap Basu & Max Gillman & Joseph Pearlman, 2009. " Inflation, Human Capital and Tobin's q," CDMA Conference Paper Series, Centre for Dynamic Macroeconomic Analysis 0904, Centre for Dynamic Macroeconomic Analysis.
  9. Baxter, Marianne & Farr, Dorsey D., 2005. "Variable capital utilization and international business cycles," Journal of International Economics, Elsevier, Elsevier, vol. 65(2), pages 335-347, March.
  10. Jing Dang & Max Gillman & Michal Kejak, 2011. "Real Business Cycles with a Human Capital Investment Sector and Endogenous Growth: Persistence, Volatility and Labor Puzzles," IEHAS Discussion Papers, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences 1128, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  11. Alessia Paccagnini, 2012. "Comparing Hybrid DSGE Models," Working Papers, University of Milano-Bicocca, Department of Economics 228, University of Milano-Bicocca, Department of Economics, revised Dec 2012.
  12. Paccagnini, Alessia, 2010. "DSGE Model Validation in a Bayesian Framework: an Assessment," MPRA Paper 24509, University Library of Munich, Germany.

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