International Business Cycles and Exchange Rates |
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Authors: | Christian Zimmermann |
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Institution: | Universitédu Québec àMontréal, Canada |
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Abstract: | Models of international real business cycles are not able to account for the high volatility of exports, imports, the trade balance, and the terms of trade. By introducing exogenous exchange rate movements in addition to standard technological shocks, the model presented here comes much closer to replicating the relatively high volatility observed in the data while also improving other moments. |
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