Terms of Trade, Business Cycles and Tobin's q in Developing Open Economies

Victor Pacharoni

No 293, Econometric Society 2004 Latin American Meetings from Econometric Society

Abstract: This paper examines the relationship of business cycles, the terms of trade and Tobin's q using a three-sector dynamic stochastic general equilibrium model for a small open economy. Results show that terms of trade shocks account for half of actual volatility of GDP and stock market indices for developing countries. The model fails to replicate the actual volatility of stock market indices for developed economies

Keywords: business cycles; the terms of trade and Tobin's q (search for similar items in EconPapers)
JEL-codes: E32 F41 (search for similar items in EconPapers)
Date: 2004-08-11
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Persistent link: https://EconPapers.repec.org/RePEc:ecm:latm04:293

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