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between the United States and the rest of the world, this paper asks to what extent an asymmetric productivity shock in the … second half of the 1990s. The paper concludes that the Balassa-Samuelson effect of such a productivity shock is only part of … the story. A second shock, a broadly defined risk premium shock, and some uncertainty about the persistence of both shocks …
Persistent link: https://www.econbiz.de/10013317763
between the United States and the rest of the world, this paper asks to what extent an asymmetric productivity shock in the … second half of the 1990s. The paper concludes that the Balassa-Samuelson effect of such a productivity shock is only part of … the story. A second shock, a broadly defined “risk premium” shock, and some uncertainty about the persistence of both …
Persistent link: https://www.econbiz.de/10014399692
A central puzzle in international finance is that real exchange rates are volatile and, in stark contradiction to effcient risk-sharing, negatively correlated with cross-country consumption ratios. This paper shows that incomplete asset markets and a low price elasticity of tradables can account...
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Using vector autoregressions on U.S. time series relative to an aggregate of industrialized countries, this paper provides new evidence on the dynamic effects of government spending and technology shocks on the real exchange rate and the terms of trade. To achieve identification, we derive...
Persistent link: https://www.econbiz.de/10003750522