The Volatility of the Tradeable and Nontradeable Sectors: Theory and Evidence

Laura Povoledo

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates the business cycle fluctuations of the tradeable and nontradeable sectors of the US economy. Then, it evaluates whether a "New Open Economy" model having prices sticky in the producer's currency can reproduce the observed fluctuations qualitatively. The answer is positive: both in the model and in the data the standard deviations of tradeable inflation, output and employment are significantly higher than the standard deviations of the corresponding nontradeable sector variables. A key role in generating this result is played by the greater responsiveness of tradeable sector variables to monetary shocks.

Keywords: New Open Economy Macroeconomics; Tradeable and Nontradeable Sectors; Business Cycles. (search for similar items in EconPapers)
JEL-codes: E32 F41 (search for similar items in EconPapers)
Date: 2009-02, Revised 2009-02
New Economics Papers: this item is included in nep-cba, nep-mac and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://mpra.ub.uni-muenchen.de/14852/2/MPRA_paper_14852.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/23047/2/MPRA_paper_23047.pdf revised version (application/pdf)

Related works:
Working Paper: The Volatility of the Tradeable and Nontradeable Sectors: Theory and Evidence (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:14852

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