Povoledo, Laura (2009): The Volatility of the Tradeable and Nontradeable Sectors: Theory and Evidence.
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Abstract
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 |
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Institution: | University of Reading |
Original Title: | The Volatility of the Tradeable and Nontradeable Sectors: Theory and Evidence |
Language: | English |
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 |
Item ID: | 14852 |
Depositing User: | Laura Povoledo |
Date Deposited: | 28 Apr 2009 05:04 |
Last Modified: | 27 Sep 2019 05:58 |
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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/14852 |
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