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News and business cycles in open economies / Nir Jaimovich, Sergio Rebelo

Author
Jaimovich, Nir
Published
Cambridge, Mass. : National Bureau of Economic Research, [2007]
Copyright Date
©2007
Physical Description
16 pages, 6 unnumbered pages : illustrations ; 22 cm.
Additional Creators
Rebelo, Sergio and National Bureau of Economic Research
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Summary
It is well known that the neoclassical model does not generate comovement among macroeconomic aggregates in response to news about future total factor productivity. We show that this problem is generally more severe in open economy versions of the neoclassical model. We present an open economy model that generates comovement both in response to sudden stops and to news about future productivity and investment-specific technical change. We find that comovement is easier to generate in the presence of weak short-run wealth effects on the labor supply, adjustment costs to labor, and/or investment, and whenever the real interest rate faced by the economy rises with the level of net foreign debt.
Subject(s)
Note
"September 2007."
Bibliography Note
Includes bibliographical references (pages 14-16).
Other Forms
Also available in PDF from the NBER world wide web site (www.nber.org).
View MARC record | catkey: 4046058