International Real Business Cycles among Heterogeneous Countries

Christian Zimmermann ()

No 38, Cahiers de recherche CREFE / CREFE Working Papers from CREFE, Université du Québec à Montréal

Abstract: Business cycle statistics differ widely across countries, especially for trade-related variables. Part of these variations relates to the size of the economies and to their distance from each other. This paper asks whether a three-country model is able to display the marked diversity of business cycle statistics observed across countries. The model is calibrated to two specific examples with Canada and Switzerland. Our findings are that most of the diversity of the business cycle can be accounted for by size and distance, and that trade is not a strong channel of diffusion of cycles

Les statistiques du cycle conjoncturel varient fortement d'un pays à un autre, spécialement pour les variables liées au commerce. Cette variété dépend en partie de la taille des économies et de leurs distances respectives. Ce papier étudie si un modèle à trois pays est capable de générer parmi ces pays la diversité des statistiques du cycle observée. Le modèle est calibré à deux exemples, le Canada et la Suisse. Nous trouvons que la majeure partie de la diversité du cycle conjoncturel provient de la taille et de la distance et que le commerce n'est pas un canal important de la diffusion des cycles.

Keywords: open economy macroeconomics; real business cycle models; small countries (search for similar items in EconPapers)
JEL-codes: E32 F41 (search for similar items in EconPapers)
Date: 1995-05
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Published in European Economic Review, 41(2), pages 319-355, February 1997

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Related works:
Working Paper: International Real Business Cycles among Heterogeneous Countries (1996)
Journal Article: International real business cycles among heterogeneous countries (1997)
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