The World Has More Than Two Countries: Implications of Multi- Country International Real Business Cycle Models

Hirokazu Ishise ()

No 11-E-11, IMES Discussion Paper Series from Institute for Monetary and Economic Studies, Bank of Japan

Abstract: The cross-country correlations of international real business cycle models depend critically on the number of countries in the models. A positive productivity shock in one country will stimulate investment in the country that has experienced the shock, while reducing internal investment in the other countries, which will then simultaneously experience a slump. This comovement mechanism is absent in two-country models.

Keywords: International Real Business Cycles; Cross-Country Correlations; Multi-Country; Country Size (search for similar items in EconPapers)
JEL-codes: E32 F41 (search for similar items in EconPapers)
Date: 2011-05
New Economics Papers: this item is included in nep-bec, nep-cba, nep-dge, nep-mac and nep-opm
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Citations: View citations in EconPapers (4)

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