The World Has More Than Two Countries: Implications of Multi- Country International Real Business Cycle Models
AbstractThe cross-country correlations of international real business cycle models depend critically on the number of countries in the models. A positive productivity shock in one country will stimulate investment in the country that has experienced the shock, while reducing internal investment in the other countries, which will then simultaneously experience a slump. This comovement mechanism is absent in two-country models.
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Bibliographic InfoPaper provided by Institute for Monetary and Economic Studies, Bank of Japan in its series IMES Discussion Paper Series with number 11-E-11.
Date of creation: May 2011
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More information through EDIRC
International Real Business Cycles; Cross-Country Correlations; Multi-Country; Country Size;
Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-05-30 (All new papers)
- NEP-BEC-2011-05-30 (Business Economics)
- NEP-CBA-2011-05-30 (Central Banking)
- NEP-DGE-2011-05-30 (Dynamic General Equilibrium)
- NEP-MAC-2011-05-30 (Macroeconomics)
- NEP-OPM-2011-05-30 (Open Economy Macroeconomics)
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