A note on the volatility of the tradeable and nontradeable sectors

Povoledo, Laura

Abstract

This note evaluates whether a New Open Economy model can reproduce qualitatively the observed fluctuations of the tradeable and nontradeable sectors of the U.S. economy. The answer is positive: both in the model and in the data, the standard deviations of tradeable inflation, output, and employment are significantly higher than the standard deviations of the corresponding nontradeable sector variables. The key role in generating this result is played by the greater responsiveness of tradeable sector variables to monetary shocks. © 2012 Cambridge University Press.

• Presentation Conference Type: Conference Paper (published)
• Publication Date: Jul 1, 2013
• Deposit Date: Apr 23, 2012
• Publicly Available Date: Nov 15, 2016
• Journal: Macroeconomic Dynamics
• Print ISSN: 1365-1005
• Electronic ISSN: 1469-8056
• Publisher: Cambridge University Press (CUP)
• Peer Reviewed: Peer Reviewed
• Volume: 17
• Issue: 5
• Pages: 1158-1168
• DOI: https://doi.org/10.1017/S1365100511000782
• Keywords: new open economy macroeconomics, tradeable and nontradeable sectors, business cycles
• Public URL: https://uwe-repository.worktribe.com/output/949537
• Publisher URL: http://dx.doi.org/10.1017/S1365100511000782
• Contract Date: Nov 15, 2016