The rapid growth of international trade and cross ownership during the last decades has changed the structure of economic interdependencies in the world economy. Empirical research provides evidence of the relevance of foreign direct investment as a further transmission channel of business cycles. There exist first multi-country business cycle models incorporating this feature. This project aims at integrating internal capital markets of multinational corporations in such a model since these markets play an important role in the transmission and were neglected so far.

Project duration

01.07.2010 - 31.12.2010

Project members

Dr. Claudia Fries (Coordinator)