Research Output per year
We show that a â€¡ex-price two-sector open economy DSGE model can explain the poor degree of international risk sharing and exchange rate disconnect. We use a suite of model evaluation measures and examine the role of (i) traded and non-traded sectors; (ii) financial market incompleteness; (iii) preference shocks; (iv) deviations from UIP condition for the exchange rates; and (v) creditor status in net foreign assets. We find that there is a good case for both traded and non-traded productivity shocks as well as UIP deviations in explaining the puzzles.
|Place of Publication||St. Andrews|
|Publisher||Centre for Dynamic Macroeconomic Analysis|
|Number of pages||55|
|Publication status||Published - 2008|
|Name||CDMA Working Paper Series|
|Publisher||School of Economics and Finance, University of St. Andrews|
- current account dynamics
- real exchange rates
- incomplete markets
- financial frictions
1 Jul 2010, In : Open Economies Review. 21, 3, p. 365-391 27 p.
Research output: Contribution to journal › Article
2008, St. Andrews: Scottish Institute for Research in Economics , 56 p. (SIRE Discussion Papers; no. 2008-53).
Research output: Working paper › Discussion paper
Bhattacharjee, A., Chadha, J. S., & Sun, Q. (2008). Productivity, Preferences and UIP deviations in an Open Economy Business Cycle Model. (CDMA Working Paper Series; No. CDMA08/08). Centre for Dynamic Macroeconomic Analysis. http://ideas.repec.org/p/san/cdmawp/0808.html