Financial autarky and international business cycles

• 成果类型: Article
• 署名作者: Heathcote, J; Perri, F
• 署名单位: New York University; Duke University; Georgetown University; Princeton University; Centre for Economic Policy Research - UK
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/S0304-3932(02)00103-4
• 发表日期: 2002
• 页码: 601-627
• 关键词: Incomplete markets; international financial markets; risk sharing

摘要

We present a two-country, two-good model in which there do not exist any markets for international trade in financial assets. We compare the predictions of this model to those of two other models, one in which markets are complete and a second in which a single non-contingent bond is traded. We find that only the financial autarky model can generate volatility in the terms of trade similar to that in data for the floating rate period and, at the same time, account for observed cross-country output, consumption, investment and employment correlations. We interpret our findings as evidence that the extent of international borrowing and lending opportunities is important for the international business cycle. (C) 2002 Elsevier Science B.V. All rights reserved.