Medium Term Business Cycles in Developing Countries
American Economic Journal: Macroeconomics
vol. 6,
no. 4, October 2014
(pp. 209-45)
Abstract
We study the transmission of business cycle fluctuations for developed (N ) to developing economies (S ) with a two-country, asymmetric, DSGE model with endogenous development of new technologies in N, and sunk costs of exporting and transferring the production of the intermediate goods to S. Consistent with the data, the flow of technologies from N to S co-moves positively with output in N and S; shocks to N have a large effect on S; business cycles in N lead over medium term fluctuations in S; the cross-correlation of outputs is larger than consumption; and interest rates in S are countercyclical.Citation
Comin, Diego, Norman Loayza, Farooq Pasha, and Luis Serven. 2014. "Medium Term Business Cycles in Developing Countries." American Economic Journal: Macroeconomics, 6 (4): 209-45. DOI: 10.1257/mac.6.4.209Additional Materials
JEL Classification
- E13 General Aggregative Models: Neoclassical
- E32 Business Fluctuations; Cycles
- F14 Empirical Studies of Trade
- F21 International Investment; Long-term Capital Movements
- F32 Current Account Adjustment; Short-term Capital Movements
- O19 International Linkages to Development; Role of International Organizations
- O33 Technological Change: Choices and Consequences; Diffusion Processes
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