The Volatility of the Tradeable and Nontradeable Sectors: Theory and Evidence
Laura Povoledo
No 906, Working Papers from Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol
Abstract:
This paper investigates the business cycle fluctuations of the tradeable and nontradeable sectors of the US economy. Then, it evaluates whether a “New Open Economy” model having prices sticky in the producer’s currency can reproduce the observed fluctuations qualitatively. The answer is positive: both in the model and in the data the standard deviations of tradeable inflation, output and employment are significantly higher than the standard deviations of the corresponding nontradeable sector variables. A key role in generating this result is played by the greater responsiveness of tradeable sector variables to monetary shocks.
Keywords: New Open Economy Macroeconomics; Tradeable and Nontradeable Sectors; Business Cycles. (search for similar items in EconPapers)
JEL-codes: E32 F41 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2009-04
New Economics Papers: this item is included in nep-mac and nep-opm
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Citations: View citations in EconPapers (1)
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http://carecon.org.uk/DPs/0906.pdf First version, 2009 (application/pdf)
Related works:
Working Paper: The Volatility of the Tradeable and Nontradeable Sectors: Theory and Evidence (2009) 
Working Paper: The Volatility of the Tradeable and Nontradeable Sectors: Theory and Evidence (2009) 
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Persistent link: https://EconPapers.repec.org/RePEc:uwe:wpaper:0906
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