Medium Term Business Cycles in Developing Countries

Diego Comin, Norman Loayza (), Farooq Pasha and Luis Servén

No 15428, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We build a two country asymmetric DSGE model with two features: (i) endogenous and slow diffusion of technologies from the developed to the developing country, and (ii) adjustment costs to investment flows. We calibrate the model to match the Mexico-U.S. trade and FDI flows. The model is able to explain the following stylized facts: (i) U.S. and Mexican output co-move more than consumption; (ii) U.S. shocks have a larger e¤ect on Mexico than in the U.S.; (iii) U.S. business cycles lead over medium term fluctuations in Mexico; (iv) Mexican consumption is more volatile than output.

JEL-codes: E3 F1 F2 F4 O3 (search for similar items in EconPapers)
Date: 2009-10
New Economics Papers: this item is included in nep-cba, nep-dev, nep-dge, nep-lam, nep-mac and nep-opm
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Citations: View citations in EconPapers (14)

Published as Diego Comin & Norman Loayza & Farooq Pasha & Luis Serven, 2014. "Medium Term Business Cycles in Developing Countries," American Economic Journal: Macroeconomics, American Economic Association, vol. 6(4), pages 209-45, October.

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Related works:
Journal Article: Medium Term Business Cycles in Developing Countries (2014)
Working Paper: Medium Term Business Cycles in Developing Countries (2011)
Working Paper: Medium Term Business Cycles in Developing Countries (2010)
Working Paper: Medium-term business cycles in developing countries (2009)
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