Real Business Cycles in Emerging Countries? / Javier García-Cicco, Roberto Pancrazi, Martín Uribe.

Format:

Book

Author/Creator:

García-Cicco, Javier.

Contributor:

National Bureau of Economic Research.

Pancrazi, Roberto.

Uribe, Martín.

Series:

Working Paper Series (National Bureau of Economic Research) no. w12629.

NBER working paper series no. w12629

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2006.

Summary:

We use more than one century of Argentine and Mexican data to estimate the structural parameters of a small-open-economy real-business-cycle model driven by nonstationary productivity shocks. We find that the RBC model does a poor job at explaining business cycles in emerging countries. We then estimate an augmented model that incorporates shocks to the country premium and financial frictions. We find that the estimated financial-friction model provides a remarkably good account of business cycles in emerging markets and, importantly, assigns a negligible role to nonstationary productivity shocks.

Notes:

Print version record

October 2006.