Modeling News-Driven International Business Cycles

Beaudry, Paul, Dupaigne, Martial and Portier, Franck (2009) Modeling News-Driven International Business Cycles. TSE Working Paper, n. 09-117

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Official URL: http://tse-fr.eu/pub/22242

Abstract

This paper reexamines the question of how to explain business cycle co-movements within and between countries. First, we present two simple theoretically flexible price models to illustrate how and why news shocks can generate robust positive co-movements in economic activity across
countries. We also discuss under what conditions the multi-sector version of the model generates appropriate business cycle patterns within countries. Second, we develop a quantitative two-country
multi-sector model that is capable of replicating many international business cycle facts. The model is a two-country extension of the closed economy model of Beaudry and Portier [2004], in which there
are limited possibilities to reallocate factors between investment and consumption good sectors.

Item Type: Monograph (Working Paper)
Language: English
Date: November 2009
Uncontrolled Keywords: business cycles, expectations, international fluctuations
JEL codes: E32 - Business Fluctuations; Cycles
F41 - Open Economy Macroeconomics
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 18 Jan 2012 06:00
Last Modified: 07 Mar 2018 13:22
OAI ID: oai:tse-fr.eu:22242
URI: http://publications.ut-capitole.fr/id/eprint/3267

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