This paper re-examines the role of real supply shocks in international business cycles. In contrast to previous studies, we extend the concept of supply shocks beyond the productivity shock towards labor supply shocks. Our analysis simultaneously identifies five real and nominal disturbances in...

This study analyzes the dynamics between real effective exchange rates and current account patterns from a novel perspective. We start by dissecting long-run and time-varying short-run dynamics between both variables. Following this, we extend our framework by including interest rates into our...