International macroe.. - Free

366 SUBJECT INDEXRisk neutrality, 9, 176, 203Risk pooling equilbrium, 112, 117Risk premiumAs explanation of deviationfrom uncovered interestparity, 10Lucas model, 174Lucas state contingent, 127,130Risk sharing, efficient conditions,111SSaddle path solution, 259S-curve, 315, 321Second-generation model, 333—341Segmented goods markets internationally,285Self-fulÞlling crises, 342Shadow prices, 113Short position (exposure), 6Siegel’s paradox, 203SigniÞcance, Statistical versus economic,217Simulated method of moments,38—40Simulated method of momentsAsymptotic distribution, 40Estimating the Krugman model,315Simulating one-country real businesscycle model, 148Simulating two-country real businesscycle model, 158Small country assumption, 229Social Optimum, 105, 109—111Social planner’s problem, 110, 141,142Spectral density function, 73, 75Spectral representationCycles and periodicity, 68Of time series, 68—74Phase shift, 68Spot transactions, 3Static expectations, 230Steady stateOne-country real business cyclemodel, 143—144Pricing-to-market model, 292Redux model, 272—274Two-country real business cyclemodel, 153—154Sticky price adjustment ruleDornbusch model, 238Stochastic Mundell-Flemingmodel, 242Sticky price models, 229—302Stochastic calculus, 306—308Stochastic processContinuous time, 306Diffusion, 306Stochastic trend process, 64Stochastic-difference equationFirst-order in the monetarymodel, 85Nonlinear in real business cyclemodel, 143Second-order in real businesscycle model, 144, 156Strict exogeneity, 33Studentized coefficient, 44Survey expectations, 184—186