Autore
Ubide, Angel J.

Titolo
The international transmission of shocks in an imperfectly competitive international business cycle model.
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1996 - Fascicolo: 31 - Pagina iniziale: 1 - Pagina finale: 62

This paper investigates the effects of introducing imperfect competition in an international business cycle model. We provide some international evidence on markups and analyze the implications of increasing returns to scale and monopolistic competition for the effects and the international transmission of technology and government spending shocks. We also consider exogenous markup fluctuations as a source of shocks and of transmission of business cycles. Wo show that imperfect competition improves the behaviour of a standard international business cycle model, although the behavior of foreign trade variables remains unexplained, and that it has important implications for the effects of government spending shocks. An imperfectly competitive model driven by government shocks can explain the international business cycle at least as well as a perfectly competitive model driven by technology and government shocks. The main effect of imperfect competition is the amplification of the effects of both technology and fiscal shocks, a fact which can he crucial when using these models for welfare analysis.



Testo completo: http://hdl.handle.net/1814/603

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