MODELLING LARGE OPEN ECONOMIES WITH INTERNATIONAL LINKAGES: THE USA AND EURO AREA
Empirical modelling of the linkages between the euro area and the USA requires an open economy framework. The methodology proposed in this paper achieves identification of a structural vector error correction model by supplementing restrictions from economic theory with assumptions for the direction...
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| Veröffentlicht in: | Journal of applied econometrics (Chichester, England) England), 2014-04, Vol.29 (3), p.377-393 |
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| container_end_page | 393 |
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| container_issue | 3 |
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| container_title | Journal of applied econometrics (Chichester, England) |
| container_volume | 29 |
| creator | Dungey, Mardi Osborn, Denise R. |
| description | Empirical modelling of the linkages between the euro area and the USA requires an open economy framework. The methodology proposed in this paper achieves identification of a structural vector error correction model by supplementing restrictions from economic theory with assumptions for the direction of causality in cross-country contemporaneous relationships. Our baseline model assumes contemporaneous causality runs from the USA to the euro area for both output and inflation, with monetary policy domestically focused. The role of the USA as leading the euro area business cycle is reinforced by our results, but strong bidirectional cross-country interactions are uncovered for inflation and interest rates. |
| doi_str_mv | 10.1002/jae.2323 |
| format | Article |
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The role of the USA as leading the euro area business cycle is reinforced by our results, but strong bidirectional cross-country interactions are uncovered for inflation and interest rates.</description><subject>Causality</subject><subject>Economic models</subject><subject>Economic theory</subject><subject>Error correction models</subject><subject>Europe</subject><subject>Eurozone</subject><subject>Identification</subject><subject>Inflation</subject><subject>Interest rates</subject><subject>International comparisons</subject><subject>Methodology</subject><subject>Monetary policy</subject><subject>Open economies</subject><subject>Output</subject><subject>Studies</subject><subject>U.S.A</subject><issn>0883-7252</issn><issn>1099-1255</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2014</creationdate><recordtype>article</recordtype><recordid>eNp10F1LwzAYBeAgCs4P8A8IAW-86czH0iTehRm7atdq16F3IWsz2NxWbTZ0_97KREHw6r14Hw6HA8AZRl2MELmaW9cllNA90MFIygATxvZBBwlBA04YOQRH3s8RQiFCvAMeh9mNTpI4jWCi8kjD7EGnUPezNBvGegSf4mIA47TQeaqKOEtVAlt8ryI9uobFQMPxSEGV3kA9zjOocq1OwMHULrw7_b7HYHyri_4gSLIo7qskKHsM0cByZyfEMikkttZigpioMJe9CltROSIoKyc2tLInKzkNEa_khDOMXViVE1FKegwud7mvTf22cX5tljNfusXCrly98QYzgimlKOy19OIPndebZtW2axVmXGDK2W9g2dTeN25qXpvZ0jZbg5H52ta025qvbVsa7Oj7bOG2_zpzp_S3P9_5uV_XzY8nYYiE5Pg3b-bX7uPnb5sXE_K2m3lKIyNv-0XyTAsj6SeLqYmz</recordid><startdate>201404</startdate><enddate>201404</enddate><creator>Dungey, Mardi</creator><creator>Osborn, Denise R.</creator><general>Blackwell Publishing Ltd</general><general>Wiley (Variant)</general><general>Wiley Periodicals Inc</general><scope>BSCLL</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope><scope>JQ2</scope></search><sort><creationdate>201404</creationdate><title>MODELLING LARGE OPEN ECONOMIES WITH INTERNATIONAL LINKAGES: THE USA AND EURO AREA</title><author>Dungey, Mardi ; Osborn, Denise R.</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c4503-a7eab2a59891aaa12058d1794d1a8de2835cba6a949d9f607d9b7511e6dcb8c93</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2014</creationdate><topic>Causality</topic><topic>Economic models</topic><topic>Economic theory</topic><topic>Error correction models</topic><topic>Europe</topic><topic>Eurozone</topic><topic>Identification</topic><topic>Inflation</topic><topic>Interest rates</topic><topic>International comparisons</topic><topic>Methodology</topic><topic>Monetary policy</topic><topic>Open economies</topic><topic>Output</topic><topic>Studies</topic><topic>U.S.A</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Dungey, Mardi</creatorcontrib><creatorcontrib>Osborn, Denise R.</creatorcontrib><collection>Istex</collection><collection>CrossRef</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><collection>ProQuest Computer Science Collection</collection><jtitle>Journal of applied econometrics (Chichester, England)</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Dungey, Mardi</au><au>Osborn, Denise R.</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>MODELLING LARGE OPEN ECONOMIES WITH INTERNATIONAL LINKAGES: THE USA AND EURO AREA</atitle><jtitle>Journal of applied econometrics (Chichester, England)</jtitle><addtitle>J. Appl. Econ</addtitle><date>2014-04</date><risdate>2014</risdate><volume>29</volume><issue>3</issue><spage>377</spage><epage>393</epage><pages>377-393</pages><issn>0883-7252</issn><eissn>1099-1255</eissn><coden>JAECET</coden><abstract>Empirical modelling of the linkages between the euro area and the USA requires an open economy framework. The methodology proposed in this paper achieves identification of a structural vector error correction model by supplementing restrictions from economic theory with assumptions for the direction of causality in cross-country contemporaneous relationships. Our baseline model assumes contemporaneous causality runs from the USA to the euro area for both output and inflation, with monetary policy domestically focused. 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| source | Access via Wiley Online Library; JSTOR Archive Collection A-Z Listing |
| subjects | Causality Economic models Economic theory Error correction models Europe Eurozone Identification Inflation Interest rates International comparisons Methodology Monetary policy Open economies Output Studies U.S.A |
| title | MODELLING LARGE OPEN ECONOMIES WITH INTERNATIONAL LINKAGES: THE USA AND EURO AREA |
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