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International Real Business Cycles among Heterogeneous Countries

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Abstract

Business cycle statistics differ widely across countries, especially for trade-related variables. Part of these variations relates to the size of the economies and to their distance from each other. This paper asks whether a three-country model is able to display the marked diversity of business cycle statistics observed across countries. The model is calibrated to two specific examples with Canada and Switzerland. Our findings are that most of the diversity of the business cycle can be accounted for by size and distance, and that trade is not a strong channel of diffusion of cycles Les statistiques du cycle conjoncturel varient fortement d'un pays à un autre, spécialement pour les variables liées au commerce. Cette variété dépend en partie de la taille des économies et de leurs distances respectives. Ce papier étudie si un modèle à trois pays est capable de générer parmi ces pays la diversité des statistiques du cycle observée. Le modèle est calibré à deux exemples, le Canada et la Suisse. Nous trouvons que la majeure partie de la diversité du cycle conjoncturel provient de la taille et de la distance et que le commerce n'est pas un canal important de la diffusion des cycles.

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  • Christian Zimmermann, 1995. "International Real Business Cycles among Heterogeneous Countries," Cahiers de recherche CREFE / CREFE Working Papers 38, CREFE, Université du Québec à Montréal.
  • Handle: RePEc:cre:crefwp:38
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    More about this item

    Keywords

    open economy macroeconomics; real business cycle models; small countries;

    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

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