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International business cycles

Author

Listed:
  • Thepthida Sopraseuth
  • Eleni Iliopulos

    (Université de Cergy-Pontoise, THEMA)

Abstract

In this paper, we examine the current state of the international macroeconomic literature, focusing specically on international spillovers and the international transmission of countryspeci c shocks. Using a general equilibrium framework, we analyze the standard two-country RBC model and its ability to replicate empirical evidence on international correlation of output, consumption, and international risk sharing. We then survey attempts in the literature to address the limitations of the model, including incorporating nominal rigidities and nancial frictions, as well as recent contributions bridging the gap between open-economy macroeconomics and international nance. These works have the potential to explain the international transmission of shocks among advanced countries by accounting for factors aecting international risk sharing.

Suggested Citation

  • Thepthida Sopraseuth & Eleni Iliopulos, 2023. "International business cycles," THEMA Working Papers 2023-03, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    • Handle: RePEc:ema:worpap:2023-03
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    References listed on IDEAS

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    More about this item

    Keywords

    international business cycles; cross-country co-movement; quantity puzzle;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles

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