Gains from Synchronization
AbstractThis paper investigates the transmission mechanisms of noise and volatility between economies through trade links, and the effects of synchronization on business cycles. We investigate the transmission of outside noise and the fluctuations that the noise generates. We identify conditions under which international economic links reduce the economic output noise emanating from noise within the individual economies. Under certain conditions, devaluation of a country's currency causes reduction in the business cycle noise and volatility as seen by that country's exporters, while increased valuation of a country's currency produces higher noise and volatility, as seen by the country's importers.
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Bibliographic InfoPaper provided by EconWPA in its series International Trade with number 0504004.
Length: 26 pages
Date of creation: 12 Apr 2005
Date of revision:
Note: Type of Document - pdf; pages: 26
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Web page: http://220.127.116.11
business cycles; synchronization; international trade; stochastic systems;
Other versions of this item:
- William Barnett & Mehmet Dalkir, 2005. "Gains from Synchronization," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 200511, University of Kansas, Department of Economics, revised Apr 2005.
- D5 - Microeconomics - - General Equilibrium and Disequilibrium
- D9 - Microeconomics - - Intertemporal Choice
- E - Macroeconomics and Monetary Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-04-16 (All new papers)
- NEP-INT-2005-04-16 (International Trade)
- NEP-MAC-2005-04-16 (Macroeconomics)
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