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Emerging Economy Business Cycles Financial Integration and Terms of Trade Shocks

This paper analyses the extent to which financial integration impacts the manner in which terms of trade affect business cycles in emerging economies. Using a s mall open economy model, we show that as capital account openness increases in an economy that faces trade shocks, business cycle volatilit...

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Bibliographic Details
Main Author: Bhattacharya, Rudrani
Other Authors: Patnaik, Ila, Pundit, Madhavi
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2013
Series:IMF Working Papers
Subjects:
General Financial Markets: General (includes Measurement And Data)
Finance: General
Current Account Adjustment
Balance Of Payments
Terms Of Trade
Macroeconomics
Empirical Studies Of Trade
Exports And Imports
Short-term Capital Movements
Current Account
International Economics
International Finance
Prices, Business Fluctuations, And Cycles: General (includes Measurement And Data)
International Trade
Economic Growth
Business Fluctuations
Trade Balance
Balance Of Trade
Financial Markets
Business Cycles
Nternational Cooperation
Cycles
Finance
Economic Policy
Financial Integration
India
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:This paper analyses the extent to which financial integration impacts the manner in which terms of trade affect business cycles in emerging economies. Using a s mall open economy model, we show that as capital account openness increases in an economy that faces trade shocks, business cycle volatility reduces. For an economy with limited financial openness, and a relatively open trade account, a model with exogenous terms of trade shocks is able to replicate the features of the business cycle
Physical Description:26 pages
ISBN:9781484354605

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