Business cycle statistics di er widely across countries for some aggregates, especially for trade-related variables. Part of these variations relates to the size of the economies and to their distance from each other. This paper asks whether a three-country model is able to display the marked diversity of business cycle statistics observed across countries. The model is calibrated to two speci ...

This paper provides some new empirical perspectives on the relationship between international trade and macroeconomic fluctuations in industrial economies. First, a comprehensive set of stylized facts concerning fluctuations in trade variables and their determinants is presented. A measure of the quantitative importance of international trade for the propagation of domestic business cycles is t...

This paper is motivated by three observations about the link between international trade and international business cycle synchronization: (1) a large increase in trade in manufactures over the last 30 years, (2) a larger fraction of trade between core and periphery regions relative to core regions is in the form of production sharing, (3) crosscountry output correlations have increased between...

This paper incorporates Northern product innovation and product-cycle-driven technology transfer into the continuum-of-goods Heckscher-Ohlin model. The creation of very skill-intensive goods induces the North to transfer production of older, less skill-intensive goods to the South. These relocated goods must be the most skill intensive by Southern standards. Thus, product cycles raise the relat...

Recently, a new resolve for both increased economic integration and monetary and exchange rate cooperation has started to emerge in ASEAN, especially since the 19971998 Asian financial crisis. According to the optimum currency area theory, the degree of trade integration is one most important criterion for joining a currency union. The large increase in intra-ASEAN trade in recent years natural...

This paper investigates the impact of terms of trade movements on the stance of fiscal policy. This analysis is timely and important because the volatility of the terms of trade has increased in recent years, largely due to significant fluctuations in commodity prices. Moreover, the prominence of fiscal policy has increased as countries have adopted aggressive discretionary actions to combat th...

This paper tries to analyze the impacts of intermediate goods trade on production, consumption, investment, net exports, employment, labor wage and capital rent of Iran in its bilateral trade relations with China. This analysis has been done by modeling, solving and calibrating an international real business cycles (IRBC) model in period 1980-2009. The results show that when elasticity of subst...