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International transmission with heterogeneous sectors

Author

Listed:
  • Jin, Keyu
  • Li, Nan

Abstract

This paper documents new facts about the behavior of capital- and labor-intensive goods over the business cycle and also identifies a mechanism that generates international investment comovement through shifting compositional changes of production and trade across sectors. Our model’s quantitative predictions not only match aggregate and sectoral statistics but also generate empirically plausible sectoral composition effects. Finally, we show that essential segments of the transmission process receive empirical support.

Suggested Citation

  • Jin, Keyu & Li, Nan, 2018. "International transmission with heterogeneous sectors," LSE Research Online Documents on Economics 88189, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:88189
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    File URL: http://eprints.lse.ac.uk/88189/
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    References listed on IDEAS

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    1. Alejandro Cunat & Marco Maffezzoli, 2004. "Hecksher-Ohlin Business Cycles," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 7(3), pages 555-585, July.
    2. Backus, David K. & Smith, Gregor W., 1993. "Consumption and real exchange rates in dynamic economies with non-traded goods," Journal of International Economics, Elsevier, vol. 35(3-4), pages 297-316, November.
    3. Burstein, Ariel & Kurz, Christopher & Tesar, Linda, 2008. "Trade, production sharing, and the international transmission of business cycles," Journal of Monetary Economics, Elsevier, vol. 55(4), pages 775-795, May.
    4. Coeurdacier, Nicolas, 2009. "Do trade costs in goods market lead to home bias in equities?," Journal of International Economics, Elsevier, vol. 77(1), pages 86-100, February.
    5. Benigno, Gianluca & Thoenissen, Christoph, 2008. "Consumption and real exchange rates with incomplete markets and non-traded goods," Journal of International Money and Finance, Elsevier, vol. 27(6), pages 926-948, October.
    6. Giancarlo Corsetti & Luca Dedola & Sylvain Leduc, 2008. "International Risk Sharing and the Transmission of Productivity Shocks," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(2), pages 443-473.
    7. repec:hal:wpspec:info:hdl:2441/c8dmi8nm4pdjkuc9g708n2m4m is not listed on IDEAS
    8. repec:hal:spmain:info:hdl:2441/c8dmi8nm4pdjkuc9g708n2m4m is not listed on IDEAS
    9. Campolmi, Alessia & Gnocchi, Stefano, 2016. "Labor market participation, unemployment and monetary policy," Journal of Monetary Economics, Elsevier, vol. 79(C), pages 17-29.
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    Cited by:

    1. Kim, Daisoon, 2021. "Economies of scale and international business cycles," Journal of International Economics, Elsevier, vol. 131(C).
    2. Shang-Jin Wei & Yinxi Xie, 2022. "On the Wedge Between the PPI and CPI Inflation Indicators," Staff Working Papers 22-5, Bank of Canada.

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    More about this item

    Keywords

    International Business Cycles; International Comovement; Relative Prices; Factor proportions trade;
    All these keywords.

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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