This paper presents a cross-country horizon analysis of departures from full-information rational expectations (FIRE) among professional forecasters from 18 OECD countries. Using four well-known tests of FIRE, I find significant heterogeneity in the cross-section of results. My findings...

We develop a multivariate dynamic factor model that exploits euro area country-specific information on output and inflation for estimating an area-wide measure of the output gap. In the proposed multi-country framework we moreover allow for flexible stochastic volatility (SV) specifications for...

This paper studies the role of differences in the patterns of production and international trade on the business cycle volatility of emerging and developed economies. We study a multi-sector small open economy in which firms produce and trade commodities and manufactures. We estimate the model...