International business cycles

Thepthida Sopraseuth and Eleni Iliopulos

No 2023-03, THEMA Working Papers from THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise

Abstract: In this paper, we examine the current state of the international macroeconomic literature, focusing specically on international spillovers and the international transmission of countryspeci c shocks. Using a general equilibrium framework, we analyze the standard two-country RBC model and its ability to replicate empirical evidence on international correlation of output, consumption, and international risk sharing. We then survey attempts in the literature to address the limitations of the model, including incorporating nominal rigidities and nancial frictions, as well as recent contributions bridging the gap between open-economy macroeconomics and international nance. These works have the potential to explain the international transmission of shocks among advanced countries by accounting for factors aecting international risk sharing.

Keywords: international business cycles; cross-country co-movement; quantity puzzle (search for similar items in EconPapers)
JEL-codes: E44 F41 F42 F44 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-dge, nep-fdg, nep-mac and nep-opm
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Persistent link: https://EconPapers.repec.org/RePEc:ema:worpap:2023-03

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