Faraway, so close! International transmission in the medium-term cycle of advanced economies*

• 成果类型: Article
• 署名作者: Correa-Lopez, Monica; de Blas, Beatriz
• 署名单位: Banco de Espana; Autonomous University of Madrid
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2021.103498
• 发表日期: 2021
• 关键词: Medium-term business cycles; international trade; Embodied growth; heterogeneous firms

摘要

Large US firms, by diffusing embodied technology through trade in intermediates, appear to drive Europe's output over the medium term. We develop a two-country model of endogenous growth in varieties, cross-country firm heterogeneity and trade to match this evidence. A US TFP slowdown generates a pronounced recession in Europe, while a negative investment-spe-cific shock also imparts a protracted recession in the US since GDP and firm productivity stay below trend beyond a decade. Heterogeneous firms, with endogenously changing productivity cut-offs, and the responses of innovators and adopters determine medium-term adjustment, as import switching processes unfold. (c) 2021 Elsevier B.V. All rights reserved.