Real Business Cycles in Open Economies
Year: 2001 Volume: 51 Issue: 2 Pages: 81-98
Abstract: This paper surveys recent literature on real business cycles in open economies. It focuses on the empirical regularities of international macroeconomic fluctuations and provides a short discussion of the differences between the "stylized facts" of business cycles in advanced and in developing countries. The paper reviews various real-business-cycle models, discerning one-sector models from their multi-good modifications. It also highlights discrepancies between theoretical predictions and data, such as "consumption/output correlation puzzle," "investment correlation puzzle," and "price anomaly." The paper concludes with a brief consideration of prospective directions for future research.
JEL classification: E32, F41
Keywords: real business cycle; open economy; stylized facts; macroeconomic models
RePEc: n/a
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