Recent empirical findings conclude that the terms of trade improve even after the positive productivity shock hits the economy among advanced economies. Corsetti, Martin, and Pesenti (2007), henceforth CMPs analytically show that a static two-country model with endogenous firm entry can generate...

In this paper, we decompose oil price changes into their component parts following Kilian (2009) and estimate the dynamic effects of each component on industry-level production and prices in the U.S. and Japan using identified VAR models. The way oil price changes affect each industry depends on...

The quantitative significance of shocks to the financial intermediary (FI) has not received much attention up to now. We estimate a DSGE model with what we describe as chained credit contracts, using Bayesian technique. In the model, credit-constrained FIs intermediate funds from investors to...