Productivity shocks and capital flows

Makram El-Shagi

Economics Letters, 2023, vol. 225, issue C

Abstract: In this letter, we demonstrate that the recent claim that productivity news shocks produce effects on trade and capital flows that are not in like with a standard Backus–Kehoe–Kydland model, are unique to the US and cannot be generalized. In a large set of developed countries, we show the BKK predictions to hold in both a stationary framework and using local projections to estimate impulse responses up to a 10 year horizon.

Keywords: Trade; Capital flows; Productivity shocks (search for similar items in EconPapers)
JEL-codes: F14 F21 O47 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:225:y:2023:i:c:s016517652300040x

DOI: 10.1016/j.econlet.2023.111015

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