2026-06-02T04:53:28Zhttps://riuma.uma.es/rest/oai/request

oai:riuma.uma.es:10630/286482026-02-03T10:53:02Zcom_10630_2254col_10630_37953

00925njm 22002777a 4500 dc Arespa-Castelló, Marta author Gruber, Diego author 2021-06-16 Two puzzling facts of international real business cycles are (1) weak or negative correlations between the terms of trade and output, and (2) a rise in relative consumption for countries where national goods become relatively more expensive. We show that these puzzles either vanish or become much weaker in recent data. We propose a new mechanism that generates endogenous international price movements that are consistent with both the ‘old’ and the ‘new’ facts. In this mechanism, firms operating in a monopolistically competitive environment adjust price and quality of their products in response to technological shocks. This model is consistent with the old facts if price levels are not adjusted for quality. Instead, if quality adjustments to price level are introduced, then the model’s properties are in line with the new facts. Arespa, M. and Gruber, D. (2021), Product Quality and Price Dynamics over the Business Cycle. Economica, vol. 88 (352). https://hdl.handle.net/10630/28648 10.1111/ecca.12380 Precios Calidad Competencia económica internacional Product Quality and Price Dynamics over the Business Cycle.