Near unit root small open economies

Seoane, Hernán

Publication:
Near unit root small open economies

dc.affiliation.dpto	UC3M. Departamento de Economía	es
dc.contributor.author	Seoane, Hernán
dc.date.accessioned	2022-06-03T15:29:20Z
dc.date.available	2022-06-03T15:29:20Z
dc.date.issued	2015-04-01
dc.description.abstract	The marginal utility of wealth in incomplete markets small open economy models follows a unit root process. I study the nonlinear properties of devices often used to remove the unit root and I find that they generate different dynamics when matching emerging markets. Models with endogenous discount factors reinforce consumption response to shocks and increase the countercyclicality of the trade balance to output ratio. Conversely, models with debt frictions ameliorate the responses of consumption and trade balance. Hence, to generate dynamics similar to those in emerging economies, the debt frictions need to be small, inducing a near unit root behavior in their Euler equations. This difference across models is hidden when matching developed economies because of consumption smoothing and the mild countercyclicality of the trade balance.	en
dc.identifier.bibliographicCitation	Seoane, H. D. (2015). Near unit root small open economies. Journal of Economic Dynamics and Control, 53, pp. 37-46.	en
dc.identifier.doi	https://doi.org/10.1016/j.jedc.2015.01.005
dc.identifier.issn	0165-1889
dc.identifier.publicationfirstpage	37	es
dc.identifier.publicationlastpage	46	es
dc.identifier.publicationtitle	JOURNAL OF ECONOMIC DYNAMICS & CONTROL	en
dc.identifier.publicationvolume	53	es
dc.identifier.uri	https://hdl.handle.net/10016/34996
dc.identifier.uxxi	AR/0000016792
dc.language.iso	eng	en
dc.publisher	Elsevier	en
dc.rights	© 2015 Elsevier B.V. All rights reserved	en
dc.rights	Atribución-NoComercial-SinDerivadas 3.0 España	*
dc.rights.accessRights	open access	en
dc.rights.uri	http://creativecommons.org/licenses/by-nc-nd/3.0/es/	*
dc.subject.eciencia	Economía	es
dc.subject.jel	F41
dc.subject.other	Perturbation	en
dc.subject.other	Stationarity	en
dc.subject.other	Small open economy	en
dc.subject.other	Incomplete asset markets	en
dc.title	Near unit root small open economies	en
dc.type	research article	*
dc.type.hasVersion	AM	*
dspace.entity.type	Publication