We study the quantitative effects of interest rates on the business cycles of emerging markets. The real business cycle model featured in Neumeyer and Perri (Business cycles in emerging economies: The role of interest rates.ʺ Journal of Monetary Economics, March 2005, 52 (2), 345-380.) is...

A particular challenge for the macroeconomic models is their inability to match the joint dynamics of employment, wage and output observed in the data. In this paper, we incorporate labor-leisure externalities into a standard model, as supported both by recent empirical studies in labor...