In spite of concerns about “twin deficits”(fiscal and the current account deficits) for the United
States economy, empirical evidence suggests that “twin divergence” is a more usual feature …

This paper shows that standard international business cycle models can be reconciled with
the empirical evidence on the lack of consumption risk sharing. First, we show analytically …

A shift in taxes or in government spending (a" fiscal shock") at some point in time puts a
constraint on the path of taxes and spending in the future, since the government …

Using vector autoregressions on US time series relative to an aggregate of industrialized
countries, this paper provides new evidence on the dynamic effects of government spending …

Almost everyone believes that the US current account deficit must eventually end, and that
this end will involve dollar depreciation. However, many believe that this depreciation will …

This paper analyzes the international transmission and welfare implications of productivity
gains and changes in market size when macroeconomic adjustment occurs both along the …

This paper analyses the role of asset prices in comparison to other factors, in particular
exchange rates, as a driver of the US trade balance. It employs a Bayesian structural VAR …

The international diversification puzzle is the fact that country portfolios are on average
biased toward domestic assets, while one-good international macro models with …

Business cycles are both less volatile and more synchronized with the world cycle in rich
countries than in poor ones. We develop two alternative explanations based on the idea that …

In simple one-good international macro models, the presence of non-diversifiable labor
income risk means that country portfoliosshould be heavily biased toward foreign assets …