Heckscher-Ohlin Business Cycles

Marco Maffezzoli () and Cuñat, Alejandro
Authors registered in the RePEc Author Service: Alejandro Cunat

No 3382, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This Paper introduces Heckscher-Ohlin trade features into a two-country DSGE model, and studies how productivity shocks propagate through trade in goods. In comparison with standard models, the business cycle properties of our framework are broadly compatible with the empirical evidence. Moreover, the model yields some novel predictions that distinguish it from the existing international real business cycle literature: (1) transitory shocks to productivity have permanent effects on country-level aggregate variables; (2) aggregate productivity shocks have relevant effects on the sectoral allocation of production factors; (3) under complete asset markets, the international correlation of consumption is lower than that of output; (4) the model?s predictions on the correlation of the terms of trade with the main aggregate variables are compatible with the data.

Keywords: International trade; Heckscher-ohlin; Business cycles; Productivity shocks (search for similar items in EconPapers)
JEL-codes: E32 F11 F32 F41 (search for similar items in EconPapers)
Date: 2002-04
New Economics Papers: this item is included in nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://cepr.org/publications/DP3382 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Hecksher-Ohlin Business Cycles (2004)
Working Paper: Heckscher-Ohlin Business Cycles (2003)
Working Paper: Heckscher-Ohlin Business Cycles
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:3382

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP3382

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().