News and Business Cycles in Open Economies

No 13444, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Aggregate and sectoral comovement are central features of business cycle data. Therefore, the ability to generate comovement is a natural litmus test for macroeconomic models. But it is a test that most existing models fail. In this paper we propose a unified model that generates both aggregate and sectoral comovement in response to contemporaneous shocks and news shocks about fundamentals. The fundamentals that we consider are aggregate and sectoral TFP shocks as well as investment-specific technical change. The model has three key elements: variable capital utilization, adjustment costs to investment, and a new form of preferences that allow us to parameterize the strength of short-run wealth effects on the labor supply.

JEL-codes: F3 (search for similar items in EconPapers)
Date: 2007-09
New Economics Papers: this item is included in nep-bec, nep-dge and nep-mac
Note: EFG IFM
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Published as Nir Jaimovich & Sergio Rebelo, 2008. "News and Business Cycles in Open Economies," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(8), pages 1699-1711, December.

Downloads: (external link)
http://www.nber.org/papers/w13444.pdf (application/pdf)

Related works:
Journal Article: News and Business Cycles in Open Economies (2008)
Working Paper: News and Business Cycles in Open Economies (2007)
Working Paper: News and Business Cycles in Open Economies (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:13444

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w13444

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().