We perform an empirical evaluation of the role of capacity utilization in business cycle fluctuations. We first document the relation between capacity utilization and business cycle fluctuations in historical data and then verify whether these empirical features can be explained by a dynamic...

Several authors argue that international real business cycle (IRBC) models with incomplete financial markets offer a good explanation of the ranking of cross-country correlations. Unfortunately, this conclusion is suspect, because it is commonly based on an analysis of the near steady state...

In contrast to earlier work, we study the relation between the current account and interest rate differentials. To do so, we document the relation for international data. We then interpret this relation from a two-country, dynamic, general equilibrium environment. We finally confront the...

Several authors argue that international real business cycle (IRBC) models with incomplete financial markets offer a good explanation of the ranking of cross-country correlations. Unfortunately, this conclusion is suspect, because it is commonly based on an analysis of the near steady state...

We study the effects of tax shocks on the budget and external deficits for 16 industrialized countries over the post-1970 period. Our structural approach is based on a small open economy model where a tax cut affects the external deficit by two distinct channels. The demographic channel works...

This paper presents and assessess a procedure to evaluate dynamic, stochastic, general equilibrium macroeconomic models when agents in the economy use an information set superior to that used by researchers.

Two-country single-good real business cycle models predict that the cross-country correlation of output is smaller than the cross-country correlations of consumption and productivity, in contrast to the evidence in historical samples. The objective of this paper is to reproduce the observed...

We present and assess a procedure to evaluate dynamic, stochastic, general equilibrium macroeconomic models when agents in the economy use an information set superior to that used by researchers. <P> Cette étude présente et documente une procédure d'évaluation de modèles macroéconomiques...</p>

In this paper, we test whether labor-hoarding environments with basic and augmented laws of motion provide an adequate explanation for observed business cycle dynamics. The basic law of motion assumes that the information set used by economic agents to forecast future forcing variables includes...