The paper explores the empirical dimensions of a New Open Economy Macronomy model characterized by credit market frictions. We find that these frictions are essential for the model to match a large set of moments of German data. Moreover, the simulated impulse response functions to supply and...

Meese and Rogoff [1983] show that macroeconomic models of the Seventies fail to outperform the random walk exchange rate forecasts. Macroeconomics thus provides useless information as far as out-of-sample exchange rate forecasting is concerned. However, since Meese and Rogoff's seminal paper,...

[fre] D'après Dornbusch [1976], la forte volatilité du taux de change nominal observée depuis la chute du système de Bretton Woods proviendrait d'une sur-réaction du taux de change aux politiques monétaires. Cet article évalue quantitativement la pertinence empirique de cette intuition...

This paper examines the empirical link between labor market institutions and international business cycle synchronization. Using a data panel of 20 OECD countries over the 1964-2003 period, we evaluate how cross-country labor market heterogeneity affects business cycle comovement. Our estimation...

We study fiscal devaluation in a small-open economy with labor market search frictions. Our analysis shows the key role of both dimensions in shaping the optimal tax scheme. By reducing labor market distortions, the tax reform is welfare-improving. Yet, as it makes imports more expensive, fiscal...

The paper investigates the international GDP synchronization within the international real business cycle framework (Backus, Kehoe and Kydland, 1992). It sheds new light on the comovement issue by highlighting the role of cross-country divergence in labor market institutions (LMIs). We first...

We study fiscal devaluation in a small-open economy with labor market search frictions. Our analysis shows the key role of both dimensions in shaping the optimal tax scheme. By reducing labor market distortions, the tax reform is welfare-improving. Yet, as it makes imports more expensive, fiscal...