Business Cycles and Exchange Rate Regimes
CREFE Working Paper 45
Posted: 5 Dec 1996
Date Written: November 1996
Are business cycles different according to the exchange rate regime? Baxter & Stockman have inconclusive results. We reinvestigate this question with more recent data and a different methodology and find evidence, for some aggregates, that their business cycle behavior has changed. We then try to replicate this change with an international real business cycle model with exchange rate shocks.
JEL Classification: E32, F31, F41
Suggested Citation: Suggested Citation