This paper shows that differences between the predictions of an international real business cycle model with complete markets and the predictions of a model where agentscan only trade rsk-free bonds depend heavily on the calibrated values for the degree of persistence in productivity shocks, the discount factor and the degree of international spillovers in productivity shocks. Since empirical work yields point estimates of the degrees of persistence and spillovers in productiv- ity shocks that bear large standard errors, the outcomes of quantitative studies using only the point estimates of these parameters inherit the substantial uncertainty associated with the empirical estimates.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Did you know? Citation analysis on IDEAS includes online papers that are freely accessible and whose text could be automatically analyzed, currently about 210000 papers.