Investment-Specific Technology Shocks in a Small Open Economy

Millan L. B. Mulraine ()

Macroeconomics from EconWPA

Abstract: This paper re-examines the behavioral responses of key macroeconomic variables in Canada to exogenous shocks to the relative price of investment goods. It does so by developing a stylized two-sector real business cycle model which is simulated to explore its ability to shed new light on the dynamic behavior of the standard small open economy. The results indicate that this model can qualitatively and quantitatively replicate the dynamic features of the Canadian economy, and thus shocks to investment-specific technology can be considered an important propagation mechanism for studying and understanding modern macroeconomic dynamics in small open economies.

Keywords: Endogenous rate of time preference; International real business cycle; Investment-specific shocks; Relative price of investment goods; Small open economy (search for similar items in EconPapers)
JEL-codes: E32 E37 F41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp, nep-dge and nep-mac
Date: 2005-06-10
Note: Type of Document - pdf; pages: 33. Document prepared with WinEdt .dvi, .tex, .ps available upon request
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Related works:
Working Paper: Investment-Specific Technology Shocks in a Small Open Economy (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpma:0506009

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