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

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.

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Year of publication:	2011-05
Authors:	Ishise, Hirokazu
Institutions:	Institute for Monetary and Economic Studies, Bank of Japan
Subject:	International Real Business Cycles \| Cross-Country Correlations \| Multi-Country \| Country Size

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Extent:	application/pdf
Series:	IMES Discussion Paper Series.
Type of publication:	Book / Working Paper
Notes:	Number 11-E-11
Classification:	E32 - Business Fluctuations; Cycles ; F41 - Open Economy Macroeconomics
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009018529