Firms' entry, monetary policy and the international business cycle

MPRA Paper from University Library of Munich, Germany

Abstract: This paper provides a theory of the international business cycle grounded on firms' entry and sticky prices. It shows that under simple monetary rules pro-cyclical entry and counter-cyclical markups can generate fluctuations in macroeconomic aggregates and trade variables as large as those observed in the data while at the same time providing positive international comovements. Both firms' entry and sticky prices are essential for reproducing the synchronization of the business cycles found in the data.

Keywords: firm entry, international business cycle, international comovements; variable markup; Taylor rule; exchange rate regimes (search for similar items in EconPapers)
JEL-codes: E32 E52 F41 (search for similar items in EconPapers)
Date: 2012-07
New Economics Papers: this item is included in nep-bec, nep-mac, nep-mon and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Firms' entry, monetary policy and the international business cycle (2013)
Working Paper: Firms entry, monetary policy and the international business cycle (2011)
Working Paper: Firms´ Entry, Monetary Policy and the International Business Cycle (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:41876

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