Povoledo, Laura (2009): The Volatility of the Tradeable and Nontradeable Sectors: Theory and Evidence.
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This paper investigates the business cycle fluctuations of the tradeable and nontradeable sectors of the US economy. Then, it evaluates whether a "New Open Economy" model having prices sticky in the producer's currency can reproduce the observed fluctuations qualitatively. The answer is positive: both in the model and in the data the standard deviations of tradeable inflation, output and employment are significantly higher than the standard deviations of the corresponding nontradeable sector variables. A key role in generating this result is played by the greater responsiveness of tradeable sector variables to monetary shocks.
|Item Type:||MPRA Paper|
|Institution:||University of Reading|
|Original Title:||The Volatility of the Tradeable and Nontradeable Sectors: Theory and Evidence|
|Keywords:||New Open Economy Macroeconomics; Tradeable and Nontradeable Sectors; Business Cycles.|
|Subjects:||F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics
E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations; Cycles
|Depositing User:||Laura Povoledo|
|Date Deposited:||28. Apr 2009 05:04|
|Last Modified:||22. Feb 2013 06:53|
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