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Gains from Synchronization

Author

Listed:
  • William Barnett

    (Department of Economics, The University of Kansas)

  • Mehmet Dalkir

    (Department of Economics, The University of Kansas)

Abstract

This 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.

Suggested Citation

  • 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.
    • Handle: RePEc:kan:wpaper:200511
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    File URL: http://www.ku.edu/~bgju/2005Papers/200511.pdf
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    References listed on IDEAS

    as
    1. Barnett, William A. & Serletis, Apostolos, 2000. "Martingales, nonlinearity, and chaos," Journal of Economic Dynamics and Control, Elsevier, vol. 24(5-7), pages 703-724, June.
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    3. William A. Barnett & Yijun He & ., 1999. "Stabilization Policy as Bifurcation Selection: Would Keynesian Policy Work if the World Really were Keynesian?," Macroeconomics 9906008, University Library of Munich, Germany.
    4. Grandmont, Jean-Michel, 1985. "On Endogenous Competitive Business Cycles," Econometrica, Econometric Society, vol. 53(5), pages 995-1045, September.
    5. Maurice Obstfeld & Kenneth Rogoff, 2002. "Global Implications of Self-Oriented National Monetary Rules," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(2), pages 503-535.
    6. Maliar, Lilia & Maliar, Serguei, 2004. "Endogenous Growth And Endogenous Business Cycles," Macroeconomic Dynamics, Cambridge University Press, vol. 8(5), pages 559-581, November.
    7. Robert C. Feenstra, 2002. "Border Effects and the Gravity Equation: Consistent Methods for Estimation," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(5), pages 491-506, November.
    8. Barnett, William A. & He, Yijun, 2002. "Stabilization Policy As Bifurcation Selection: Would Stabilization Policy Work If The Economy Really Were Unstable?," Macroeconomic Dynamics, Cambridge University Press, vol. 6(5), pages 713-747, November.
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    11. Selover David D. & Jensen Roderick V. & Kroll John, 2003. "Industrial Sector Mode-Locking and Business Cycle Formation," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 7(3), pages 1-39, October.
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    Cited by:

    1. Alain Raybaut, 2018. "Coupling and synchronization dynamics in endogenous business cycles models," Post-Print halshs-01941339, HAL.

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    More about this item

    Keywords

    business cycles; synchronization; international trade; stochastic systems;
    All these keywords.

    JEL classification:

    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • E - Macroeconomics and Monetary Economics

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