Relative price riddles in international business cycle theory: Are transport costs the explanation?
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- dc.contributor.author Mazzenga, Elisabetta
- dc.contributor.author Ravn, Morten O.
- dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
- dc.date.accessioned 2020-05-25T09:26:45Z
- dc.date.available 2020-05-25T09:26:45Z
- dc.date.issued 1998-05-01
- dc.date.modified 2020-05-25T09:17:39Z
- dc.description.abstract We study relative price behavior in an international business cycle model with specialization in production, in which a goods market friction is introduced through transport costs. The transport technology allows for flexible transport costs. We analyze whether this extension can account for the striking differences between theory and data as far as the moments of terms of trade and real exchange rates are concerned. We find that transport costs increase both the volatility of the terms of trade and the volatility of the real exchange rate. However, unless the transport technology is specified by a Leontief technology, transport costs do not resolve the quantitative discrepancies between theory and data. A surprising result is that transport costs may actually lower the persistence of the real exchange rate, a finding that is in contrast to much of the emphasis of the empirical literature.
- dc.format.mimetype application/pdf*
- dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=312
- dc.identifier.citation Journal of International Money and Finance, 23(4), 645-71, 2004
- dc.identifier.uri http://hdl.handle.net/10230/457
- dc.language.iso eng
- dc.relation.ispartofseries Economics and Business Working Papers Series; 312
- dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
- dc.subject.keyword international business cycles
- dc.subject.keyword terms of trade
- dc.subject.keyword real exchange rates
- dc.subject.keyword transport costs
- dc.subject.keyword Macroeconomics and International Economics
- dc.title Relative price riddles in international business cycle theory: Are transport costs the explanation?
- dc.type info:eu-repo/semantics/workingPaper