Firms' entry, monetary policy and the international business cycle

Lilia Cavallari

Journal of International Economics, 2013, vol. 91, issue 2, 263-274

Abstract: This paper proposes a two-country monetary model with firm entry as a means for alleviating the comovement puzzles in international business cycle models. It shows that business formation can generate fluctuations in output, employment, investment and trade flows close to those in the data while at the same time providing positive international comovements. Simulations show that the presence of imported investment goods is essential for replicating these facts.

Keywords: Firm entry; International business cycle; International comovements; Comovement puzzles; Taylor rule; Firm markups (search for similar items in EconPapers)
JEL-codes: E31 E32 E52 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (42)

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Related works:
Working Paper: Firms' entry, monetary policy and the international business cycle (2012)
Working Paper: Firms´ Entry, Monetary Policy and the International Business Cycle (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:91:y:2013:i:2:p:263-274

DOI: 10.1016/j.jinteco.2013.07.002

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