Series: IMF Working Papers
Author(s): International Monetary Fund
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 June 2011
Keywords: real business cycles, durables, financial frictions, business cycles, total consumption, interest rates, business cycle, elasticity of substitution, Open Economy Macroeconomics, Macroeconomic Aspects of International Trade and Finance: Forecasting and Simulation,
This paper examines how durable goods and financial frictions shape the business cycle of a small open economy subject to shocks to trend and transitory shocks. In the data, nondurable consumption is not as volatil...