This paper develops a structural VAR model to measure how a shock to one country can affect the GDP of other countries. It uses trade linkages to estimate the multiplier effects of a shock as it is transmitted through other countries' output fluctuations. The paper introduces a new specification...

Policy prescriptions have generally assumed that exchange rate depreciation would stimulate exports and curtail imports, while exchange rate appreciation would be detrimental to exports and encourage imports. This prediction has, however, often neglected to consider the existence of the import...

How the old saying “when the United States sneezes, the world catches a cold†holds true has been the subject of many research papers on global and country group business cycle synchronization and divergence. Instead of business cycle linkages, however, this paper examines the...

The academic literature has focused largely on testing for long-run fiscal sustainability. In this exercise we formulate a flexible regression model that can be used to assess the sustainability of a more recent build-up of fiscal deficits and debt that would be of major concern to policy...

In applied econometric literature, the causal inferences are often made based on highly temporally aggregated or systematically sampled data. A number of theoretical studies have pointed out that temporal aggregation has distorting effects on causal inference and systematic sampling preserves...

This paper develops a structural VAR model to measure how a shock to one country can affect the GDP of other countries. It uses trade linkages to estimate the multiplier effects of a shock as it is transmitted through other countries' output fluctuations. The paper introduces a new specification...