Summary
This study investigates interlinkage among the business cycles of countries from the viewpoint of endogenous real business cycles. For this purpose, we build a simple perfect foresight equilibrium model with two countries and characterize the global dynamics of a free-trade equilibrium as well as that of each country's autarky equilibrium by means of the fundamental structure of an economy.
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We are greatful to Murray Kemp, Mukul Majumdar, Takashi Negishi, Marcus Noland, Ian Novos, Jose Scheinkman and an anonymous referee for useful conversations and suggestions.
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Nishimura, K., Yano, M. Interlinkage in the endogenous real business cycles of international economies. Econ Theory 3, 151–168 (1993). https://doi.org/10.1007/BF01213698
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DOI: https://doi.org/10.1007/BF01213698