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Online Appendix to Human Capital and International Real Business Cycles

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  • Marco Maffezzoli

    (IGIER)

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.

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Bibliographic Info

Paper provided by Review of Economic Dynamics in its series Technical Appendices with number maffezzoli00.

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Length: 31 pages
Date of creation: May 1998
Date of revision:
Handle: RePEc:red:append:maffezzoli00

Note: The original article was published in the Review of Economic Dynamics, volume 3 (2000), pages 137-165
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Related research

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

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References

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  1. Perli, Roberto & Sakellaris, Plutarchos, 1998. "Human capital formation and business cycle persistence," Journal of Monetary Economics, Elsevier, vol. 42(1), pages 67-92, June.
  2. Ravn, Morten O., 1997. "International business cycles in theory and in practice," Journal of International Money and Finance, Elsevier, vol. 16(2), pages 255-283, April.
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  7. Sergio Rebelo, 1999. "Long Run Policy Analysis and Long Run Growth," Levine's Working Paper Archive 2114, David K. Levine.
  8. Baxter, M., 1994. "International Trade and Business Cycles," RCER Working Papers 390, University of Rochester - Center for Economic Research (RCER).
  9. Fabio Canova & Eva Ortega, 1996. "Testing calibrated general equilibrium models," Economics Working Papers 166, Department of Economics and Business, Universitat Pompeu Fabra.
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  19. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-70, November.
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  24. Canova, Fabio & Marrinan, Jane, 1998. "Sources and propagation of international output cycles: Common shocks or transmission?," Journal of International Economics, Elsevier, vol. 46(1), pages 133-166, October.
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Citations

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Cited by:
  1. 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 1128, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  2. Michael R. Pakko, 2003. "Substitution elasticities and investment dynamics in two country business cycle models," Working Papers 2002-030, Federal Reserve Bank of St. Louis.
  3. Michael R. Pakko, 2004. "A spectral analysis of the cross-country consumption correlation puzzle," Working Papers 2003-023, Federal Reserve Bank of St. Louis.
  4. Parantap Basu & Max Gillman & Joseph Pearlman, 2010. "Inflation, Human Capital and Tobin's q," IEHAS Discussion Papers 1017, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  5. Matheron, Julien, 2003. "Is growth useful in RBC models?," Economic Modelling, Elsevier, vol. 20(3), pages 605-622, May.
  6. Alejandro Cuñat & Marco Maffezzoli, . "Heckscher-Ohlin Business Cycles," Working Papers 210, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  7. Paccagnini, Alessia, 2010. "DSGE Model Validation in a Bayesian Framework: an Assessment," MPRA Paper 24509, University Library of Munich, Germany.
  8. Guo, Jang-Ting & Harrison, Sharon G., 2010. "Indeterminacy with no-income-effect preferences and sector-specific externalities," Journal of Economic Theory, Elsevier, vol. 145(1), pages 287-300, January.
  9. Baxter, Marianne & Farr, Dorsey D., 2005. "Variable capital utilization and international business cycles," Journal of International Economics, Elsevier, vol. 65(2), pages 335-347, March.
  10. Boileau, Martin, 2002. "Trade in capital goods and investment-specific technical change," Journal of Economic Dynamics and Control, Elsevier, vol. 26(6), pages 963-984, June.

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