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Article: Study findings on international economics are outlined in reports from A. Raffo and colleagues.
- Article from:
- Marketing Weekly News
- Article date:
- August 4, 2008
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"Conventional two-country RBC models interpret countercyclical net exports as reflecting primarily the dynamics of capital. I show that, quantitatively, theoretical economies rely on counterfactual terms of trade effects: trade fluctuations, on the contrary, are driven by consumption smoothing, thus generating procyclical net trade in goods," investigators in the United States report.
"I then consider a class of preferences that embeds home production in a reduced form: consumption volatility increases so that countercyclical net exports reflect primarily a strong relation between consumption and imports, as in the data. The major discrepancy between theory and ...