Trade elasticity of substitution and equilibrium dynamics

• 成果类型: Article
• 署名作者: Bodenstein, Martin
• 署名单位: Federal Reserve System - USA
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2010.01.008
• 发表日期: 2010
• 页码: 1033-1059
• 关键词: international business cycle; multiple equilibria; Real exchange rate

摘要

The empirical literature provides a wide range of estimates for trade elasticities at the aggregate level. Recent contributions in international macroeconomics suggest that low (implied) values of the trade elasticity may play an important role in understanding the disconnect between international prices and real variables. However, a standard model of the international business cycle displays multiple locally isolated equilibria if the trade is sufficiently low. The main contribution of this paper is to compute and characterize some dynamic properties of these equilibria. In simulations, the presence of multiple equilibria is shown to imply a volatile and persistent real exchange rate. (C) 2010 Elsevier Inc. All rights reserved.