Realistic cross-country consumption correlations in a two-country, equilibrium, business cycle model

Article Abstract:

An economic model was presented in which preferences were correlated between consumption and labor supply. Arrow-Debreau economic models are widely used to study business cycles, but they seem inconsistent with cross country correlates of aggregate cosumption. The model presented rectifies this. The model is of a two country, model economy in which preferences are nonseparable with consumption and labor supply. This allows for fluctuations in labor supply. The model provided high positive correlations with recorded statistics.

Models, Economic aspects, Consumption (Economics), Labor supply, Labor force

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Exchange-rate discounting

Article Abstract:

A study was made with a method for identifying the discount rate used in a present-discounted-value relationship for a nominal exchange rate, with no measurements made of the fundamentals. An identification from assumptions on the stochastic process arises, followed by fundamentals. Two applications show proof against the present model in the form of negative discount rates.

Prices and rates, Foreign exchange, Foreign exchange rates, Discount rates

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Business cycle theory and econometrics

Article Abstract:

The most recent controversy on empirical research on business cycles is on how seriously economic theory has been taken. Advances in computing, statistics, data collection and economic theory have changed business cycle research. Macroeconomic theory has been replaced by quantitative theory as evidenced by aggregate studies which compare theory with properties of data.

Analysis, Econometrics

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