Beschreibung:
<jats:p>This paper investigates the effects of introducing imperfect competition in
an international business-cycle model. We provide some international
evidence on markups and analyze the implications of increasing returns to
scale and monopolistic competition for the effects and the international
transmission of technology and government spending shocks. We also consider
exogenous markup fluctuations as a source of shocks and of transmission of
business cycles. We show that imperfect competition improves the behavior of
a standard model driven by technology shocks, although the behavior of
foreign trade variables remains unexplained. We also show that an
imperfectly competitive model driven by government shocks can explain the
international business cycle at least as well as a model driven by
technology shocks.</jats:p>