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Business Cycle Statistics: Baseline Parameters

Business Cycle Statistics: Baseline Parameters

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Figure 2. Response to 1% Increase in Home Productivity Note: These...
Figure 4. U.S. Data: HP Filtered Trend
Benchmark Parameter Values
Business Cycle Statistics: Baseline Parameters
+3 Elasticity of Substitution between Intermediate Goods: γ
Endogenous Tradability, International Relative Prices, and the International Transmission of Business Cycles
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  • Oct 2019
This paper propose a two-country, dynamic, stochastic, general equilibrium (DSGE) model with endogenous tradability, product differentiation, variously determined physical capital, and an elastic labor supply to explore the propagation of business cycles across countries. The model successfully addresses international relative price dynamics (its a...
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... Hodrick and Prescott (HP)(note 4) filter is applied to compute the model's statistics by logging and filtering the model's artificial time series. Table 2 summarizes the main statistics of the simulated model under the benchmark parameters at business cycle frequencies. I compare this to the work Ghironi & Melitz (2005), which does not incorporate capital accumulation and endogenous labor, and to statistics of the bond economy with no capital adjustment costs taken from Kehoe & Perri (2002). ...