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Firms´ Entry, Monetary Policy and the International Business Cycle

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  • Lilia CAVALLARI

Abstract

This paper proposes a two-country monetary model with firm entry as a means for alleviating the comovement puzzles in international business cycle models. It shows that business formation can generate fluctuations in output, employment, investment and trade flows close to those in the data while at the same time providing positive international comovements. Simulations show that the presence of imported investment goods is essential for replicating these facts.
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  • Lilia CAVALLARI, 2010. "Firms´ Entry, Monetary Policy and the International Business Cycle," EcoMod2010 259600037, EcoMod.
    • Handle: RePEc:ekd:002596:259600037
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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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