TY  - JOUR
AU  - Backus,David
AU  - Kehoe,Patrick J.
AU  - Kydland,Finn E.
TI  - International Business Cycles: Theory and Evidence
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4493
PY  - 1993
Y2  - October 1993
UR  - http://www.nber.org/papers/w4493
L1  - http://www.nber.org/papers/w4493.pdf
N1  - Author contact info:
David Backus
Stern School of Business
NYU
44 West 4th Street
New York, NY 10012-1126
Tel: 212/998-0873
Fax: 212/995-4221
E-Mail: dbackus@stern.nyu.edu

Patrick Kehoe
Research Department
Federal Reserve Bank of Minneapolis
90 Hennepin Avenue
Minneapolis, MN  55480-0291
Tel: 612/204-5525
Fax: 612/204-5515
E-Mail: pkehoe@res.mpls.frb.fed.us

Finn Kydland
Department of Economics
University of California, Santa Barbara
Santa Barbara, CA 93106-9210
Tel: 805/893-5464
Fax: 805/893-8830
E-Mail: kydland@econ.ucsb.edu
AB  - We review recent work comparing properties of international business cycles with those of dynamic general equilibrium models, emphasizing two discrepancies between theory and data that we refer to as anomalies.  The first is the consumption/output/productivity anomaly: in the data we generally find that the correlation across countries of output fluctuations is larger than the analogous consumption and productivity correlations.  In theoretical economies we find, for a wide range of parameter values, that the consumption correlation exceeds the productivity and output correlations.  The second anomaly concerns relative price movements: the standard deviation of the terms of trade is considerably larger in the data than it is in theoretical economies.  We speculate on changes in theoretical structure that might bring theory and data closer together.
ER  -