1. Schedule
Wednesday 16/04/08: International Comovements - Theory and Evidence
Thursday 17/04/08: Complete vs. Incomplete Markets. Intratemporal Trade Models.
Tuesday 22/04/08: PPP, LOP, PTM: Empirics
Thursday 23/04/08: PPP, LOP, PTM: Theory
Lecture Handouts
(a) Slides for Lecture 1
(b) Slides for Lecture 2
(c) Slides for Lecture 3
(d) Slides for Lecture 4
Exercises
(a) Exercise 1
(b) Exercise 2
4. Readings
Wednesday 21 and Friday 23
Backus, DK, Kehoe PJ, 1992, "International Evidence on the Historical Evidence of Business Cycles", American Economic Review, 82 (4), 864-888
Backus, DK, PJ Kehoe and FE Kydland, 1993, "International Business Cycles: Theory vs. Evidence", Quarterly Review, Federal Reserve Bank of Minneapolis.
Backus, DK, P Kehoe and FE Kydland, 1994, `Dynamics of the Trade Balance and the Terms of Trade", American Economic Review.
Baxter, M, 1995. International Trade and Business Cycles. In: Gene Grossman and Kenneth Rogoff (eds.), Handbook of International Economics, vol.3, North Holland, 1995.
Baxter, M, and MJ Crucini, 1993. Explaining Saving-Investment Correlations. American Economic Review, 83, 416-36.
Kehoe, Patrick, and Fabrizio Perri, "International Business Cycles with Incomplete Markets", Econometrica 70(3), 902-28.
Heathcote, J and F Perri, 2002, "Financial Autarky and International Business Cycles", Journal of Monetary Economics.
Obstfeld, M, and K Rogoff, 2001, "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?", NBER Macroeconomics Annual, Volume 15, 341-390
Ravn, MO., 1997, "International Business Cycles in Theory and in Practise", Journal of International Money and Finance, 16(2), 255-83.
Ravn, MO, and E. Mazzenga, 2004, "International Business Cycles: The Quantitative Role of Transportation Costs", Journal of International Money and Finance.
Schmitt-Grohe, Stephanie, and Martin Uribe, 2003, "Closing Small Open Economy Models", Journal of International Economics 61, 163-85.
Further suggested papers:
Ambler, S, E Cardia, and C Zimmermann, 2004, "International Business Cycles: What are the Facts?", Journal of Monetary Economics, 51(2), 257-76.
Backus, David K., and Gregor W. Smith, 1993, "Consumption and Real Exchange Rates in Dynamic Economies with Non-Traded Goods", Journal of International Economics, 35, 297-316.
Canova, F, and H Dellas, 1993, "Trade Interdependence and International Business Cycles", Journal of International Economics, 34, 23-48.
Canova, F and MO Ravn, 1996, "International Consumption Risk Sharing", International Economic Review, 1996, 37(3), 573-601.
Perri, F and PA Neumeyer, 2004, "Business Cycles in Emerging Economies: The Role of Interest Rates", NBER working paper no. 10387.
Kose, MA, C Otrok and CH Whiteman, 2003, "International Business Cycles: World, Region and Country Specific Factors", American Economic Review, 93(4), 1216-39.
Stockman, AC., and LL. Tesar, 1995, "Tastes and Technology in a Two-Country Model of the Business Cycle", American Economic Review, 85, 168-85.
Cole, H and M Obstfeld, 1991. Commodity Trade and International Risk Sharing: How Much do Financial Markets Matter? Journal of Monetary Economics, 28, 3-24.
Heathcote, J and F Perri, 2004, "Financial Globalization and Real Regionalization", Journal of Economic Theory.
Kollmann, Robert, 1995, "Consumption, Real Exchange Rates, and the Structure of International Capital Markets", Journal of International Money and Finance, 14, 191-211.
Tuesday 22 and Thursday 34
Imbs, Jean, Haroon Mumtaz, Morten O. Ravn and Helene Rey, 2005, "PPP Strikes Back: Aggregation and the Real Exchange Rate", Quarterly Journal of Economics.
Imbs, Jean, Haroon Mumtaz, Morten O. Ravn and Helene Rey, 2004, "Non-Linearities and Real Exchange Rate Dynamics", Journal of the European Economic Association.
Ravn, Morten O., Stephanie Schmitt-Grohe and Martin Uribe, 2007, "Pricing to Habits and the Law of One Price", American Economic Review.
Ravn, Morten O., Stephanie Schmitt-Grohe and Martin Uribe, 2007, "Incomplete Pass-Through under Deep Habits", NBER working paper no. 12961.
Rogoff, Kenneth, 1996, "The Purchasing Power Parity Puzzle", JEL.
Engel, Charles, 1999, "Accounting for US Real Exchange Rates", JPE.
Gopinath, Gita, Oleg Itskhoki, and Roberto Rigobon, 2007, "Currency Choice and Exchange Rate Pass-Through", manuscript, Harvard University.
Goldberg, Pinelopi, and Michael Knetter, 1997, "Goods Prices and Exchange Rates: What Have We Learned?", JEL.
Crucini, Mario, Chris Telmer and Marios Zachariadis, 2006, "Understanding European Real Exchange Rates", American Economic Review.
Bergin, Paul and Robert Feenstra, 2001, "Pricing-to-Markets, Staggered Contracts, and Real Exchange Rate Persistence", Journal of Monetary Economics.
Chari, V.V., Pat Kehoe and Ellen McGrattan, 2002, "Can Sticky Price Models Generate Volatile and PErsistent Real Exchange Rates?", Review of Economic Studies.
Atkeson, Andy, and Burstein, Ariel, 2006, "Pricing to Markets, Trade Costs and International Relative PRices"
Ravn, Morten O., 2001, "Imperfect Competition and Prices in a Dynamic Trade Model with Comparative Advantage".
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