We use more than one century of Argentine and Mexican data to estimate the structural parameters of a small-open-economy real-business-cycle model driven by nonstationary productivity shocks. We find that the RBC model does a poor job at explaining business cycles in emerging countries. We then...

We investigate a real business cycle (RBC) model with financial frictions for a small open economy by estimating the model solved up to the second order. The higher-order approximation more closely approximates the original model than the linear approximation. In this paper, we evaluate the...

We use more than one century of Argentine and Mexican data to estimate the structural parameters of a small-open-economy real-business-cycle model driven by nonstationary productivity shocks. We find that the RBC model does a poor job at explaining business cycles in emerging countries. We then...