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Wealth effects and countercyclical net exports
journal contribution
posted on 2023-05-17, 16:31 authored by Dmitriev, A, Roberts, ITwo-country, one-good business cycle models with Cobb–Douglas preferences predict procyclical net exports. The opposite is observed in the data. We show that introduction of preferences that eliminate wealth effects on labour supply remedies this discrepancy. It also improves the model’s ability in matching cross-country correlations.
History
Publication title
Applied Economics LettersVolume
19Issue
17Pagination
1673-1677ISSN
1350-4851Department/School
TSBEPublisher
Routledge Taylor & Francis LtdPlace of publication
4 Park Square, Milton Park, Abingdon, England, Oxfordshire, Ox14 4RnRights statement
Copyright 2012 Taylor & FrancisRepository Status
- Restricted