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Gains from Synchronization

Author

Listed:
  • William Barnett

    (University of Kansas)

  • Mehmet Dalkir

    (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," International Trade 0504004, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpit:0504004
    Note: Type of Document - pdf; pages: 26
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    References listed on IDEAS

    as
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    7. Maliar, Lilia & Maliar, Serguei, 2004. "Endogenous Growth And Endogenous Business Cycles," Macroeconomic Dynamics, Cambridge University Press, vol. 8(5), pages 559-581, November.
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    14. 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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    Full references (including those not matched with items on IDEAS)

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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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