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Human Capital and International Real Business Cycles

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  • Marco Maffezzoli

    (Istituto di Economia Politica, Università Bocconi)

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. (Copyright: Elsevier)

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File URL: http://dx.doi.org/10.1006/redy.1999.0059
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Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

Volume (Year): 3 (2000)
Issue (Month): 1 ()
Pages: 137-165

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Handle: RePEc:red:issued:v:3:y:2000:i:1:p:137-165
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Keywords: stochastic growth models; international comovements; investment comovements; human capital; knowledge spillovers;

Other versions of this item:

Find related papers by JEL classification:
  • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
  • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
  • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
  • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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Cited by:

  1. Cuñat, Alejandro & Maffezzoli, Marco, 2002. "Heckscher-Ohlin Business Cycles," CEPR Discussion Papers 3382, C.E.P.R. Discussion Papers.
  2. Parantap Basu & Max Gillman & Joseph Pearlman, 2009. " Inflation, Human Capital and Tobin's q," CDMA Conference Paper Series 0904, Centre for Dynamic Macroeconomic Analysis.
  3. Pakko, Michael R., 2004. "A spectral analysis of the cross-country consumption correlation puzzle," Economics Letters, Elsevier, vol. 84(3), pages 341-347, September.
  4. Matheron, Julien, 2003. "Is growth useful in RBC models?," Economic Modelling, Elsevier, vol. 20(3), pages 605-622, May.
  5. Jang-Ting Guo & Sharon G. Harrison, 2008. "Indeterminacy with No-Income-Effect Preferences and Sector-Specific Externalities," Working Papers 200809, University of California at Riverside, Department of Economics, revised Jul 2008.
  6. 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.
  7. Pakko Michael R., 2003. "Substitution Elasticities and Investment Dynamics in Two-Country Business Cycle Models," The B.E. Journal of Macroeconomics, De Gruyter, vol. 3(1), pages 1-20, November.
  8. Alessia Paccagnini, 2012. "Comparing Hybrid DSGE Models," Working Papers 228, University of Milano-Bicocca, Department of Economics, revised Dec 2012.
  9. Martin Boileau, 1999. "Trade in Capital Goods and Investment-Specific Technical Change," Cahiers de recherche CREFE / CREFE Working Papers 68, CREFE, Université du Québec à Montréal.
  10. Dang, Jing & Gillman, Max & Kejak, Michal, 2011. "Real Business Cycles with a Human Capital Investment Sector and Endogenous Growth: Persistence, Volatility and Labor Puzzles," Cardiff Economics Working Papers E2011/8, Cardiff University, Cardiff Business School, Economics Section.
  11. Paccagnini, Alessia, 2010. "DSGE Model Validation in a Bayesian Framework: an Assessment," MPRA Paper 24509, University Library of Munich, Germany.
  12. Max Gillman, 2013. "Lost in Translation: Unified Consumption Theory, Dynamic AS-AD, and Business Cycles," IEHAS Discussion Papers 1305, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.

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