NBER Publications by Roberto Pancrazi

We investigate the hypothesis that an RBC model driven by permanent and transitory productivity shocks can explain well observed business-cycle fluctuations in emerging countries. A drawback of existing studies is the use of short samples to identify permanent shifts in productivity. We overcome this difficulty by using more than one century of Argentine data to estimate the structural parameters of a small-open-economy RBC model. We place particular emphasis on the behavior of the trade balance because this variable plays a central role in all existing empirical or theoretical characterizations of the developing-country business-cycle. We find that the RBC model predicts a near random walk behavior for the trade balance-to-output ratio with a flat autocorrelation function close to u...