We analyze the implications of financial openness to macroeconomic volatility in a small open economy. Major … macroeconomic aggregates show non-monotonic volatility patterns with respect to the degree of financial openness in the model … without domestic financial frictions. The introduction of domestic financial frictions makes the volatility patterns flatter …

an increase in the volatility of labor income under perfect wage flexibility, and this impact is stronger in the country …

increases the conditional volatility of the Filipino stock market significantly over the next two weeks of trading. Our second … conditional volatility of returns and exchange rates …