International Business Cycles and Exchange Rates

Christian Zimmermann

No 33, Cahiers de recherche CREFE / CREFE Working Papers from CREFE, Université du Québec à Montréal

Abstract: International real business cycle models are not able to account for the high volatility of imports, exports, 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.

Les modèles internationaux du cycle réel ne sont pas capable de répliquer la forte volatilité des exportations, des importations, de la balance commerciale et des termes de l'échange. En introduisant des mouvements exogènes des taux de change, en plus des chocs technologiques usuels, le modè présenté ici parvient bien mieux à répliquer la relativement forte volatilité observée dans les données tout en améliorant d'autres statistiques.

Keywords: open economy macroeconomics; real business cycle models; exchange rates; international trade (search for similar items in EconPapers)
JEL-codes: E32 F31 F41 (search for similar items in EconPapers)
Pages: 24 pages
Date: 1994-12, Revised 1997-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Forthcoming in Review of International Economics

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Related works:
Journal Article: International Business Cycles and Exchange Rates (1999)
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