EconStor >
Queen Mary, University of London >
School of Economics and Finance, Queen Mary, University of London  >
Working Paper Series, School of Economics and Finance, Queen Mary, University of London  >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/55179
  

Full metadata record

DC FieldValueLanguage
dc.contributor.authorMale, Rachelen_US
dc.date.accessioned2010-10-22en_US
dc.date.accessioned2012-02-09T14:06:57Z-
dc.date.available2012-02-09T14:06:57Z-
dc.date.issued2010en_US
dc.identifier.urihttp://hdl.handle.net/10419/55179-
dc.description.abstractIt is well documented that business cycles of developed countries are characterised by persistent output fluctuations, and this has been the subject of much theoretical interest. However, the case for developing countries has been somewhat neglected in the literature. This paper addresses this imbalance, revealing that whilst both developed and developing countries exhibit persistent output fluctuations, there is a significant positive relationship between output persistence and level of economic development. This relationship was successfully modelled using a vertical production chain DSGE model (Huang and Liu, 2001). This model lends itself to such an analysis, as by altering the number of production stages (N) it is possible to represent economies at different levels of development. However, calibration of low input-output (Ú) parameter values for the US and UK effectively inhibited the model from generating enough persistence to match that observed in these countries. Nonetheless, after abstracting from the US and UK results, there was found to be a strong significant positive relationship between the magnitude of output persistence generated by the model and economic development. A final very significant finding of this analysis is that the model overestimates output persistence in high inflation countries and underestimates output persistence in low inflation countries. This has important implications not only for this model, but also for any economist attempting to construct a business cycle model capable of replicating the observed patterns of output persistence.en_US
dc.language.isoengen_US
dc.publisherQueen Mary, Univ. of London, School of Economics and Finance Londonen_US
dc.relation.ispartofseriesWorking Paper // School of Economics and Finance, Queen Mary, University of London 672en_US
dc.subject.jelE31en_US
dc.subject.jelE32en_US
dc.subject.jelE52en_US
dc.subject.ddc330en_US
dc.subject.keywordoutput persistenceen_US
dc.subject.keywordvertical production chainen_US
dc.subject.keywordstaggered price contractsen_US
dc.subject.keywordeconomic developmenten_US
dc.subject.keywordinflationen_US
dc.subject.stwKonjunkturen_US
dc.subject.stwGesamtwirtschaftliche Produktionen_US
dc.subject.stwVolatilitäten_US
dc.subject.stwVertikale Konzentrationen_US
dc.subject.stwEntwicklungsstufeen_US
dc.subject.stwDynamisches Gleichgewichten_US
dc.subject.stwWelten_US
dc.titleBusiness cycle persistence in developing countries: How successful is a DSGE model with a vertical production chain and sticky prices?en_US
dc.typeWorking Paperen_US
dc.identifier.ppn637434463en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Working Paper Series, School of Economics and Finance, Queen Mary, University of London

Files in This Item:
File Description SizeFormat
637434463.pdf1.39 MBAdobe PDF
No. of Downloads:
last Month last 3 Month total
Show simple item record
Download bibliographical data as: BibTeX

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.