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Three Macroeconomic Essays: Budget Stabilization Funds, Terms Of Trade, Durability And The Small Open Economy Business Cycle, Ali Mohammad Al-Nadi

Doctoral Dissertations

In this dissertation we use Dynamic Stochastic General Equilibrium DSGE) models to explain empirical regularities and policy implications related to (1) durable goods, interest rates and small open economy business cycles, (2) Terms-of-Trade (ToT) and economic fluctuations in small open economies and (3) Budget Stabilization Funds (BSFs) and States’ business cycles. In the first essay, we document that durable spending in developed small open economies constitutes a large share of their total income. Their spending is highly procyclical, sensitive to interest rates, and leads the business cycle. We address these regularities with a RBC model with durable goods. The model …