01773cas a2200241 a 4500 AALejournalIMF003025 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451851199 1018-5941 BD-DhAAL BD-DhAAL Miniane, Jacques. Productivity Shocks, Learning, and Open Economy Dynamics / Jacques Miniane. Washington, D.C. : International Monetary Fund, 2004. 1 online resource (28 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students I study the implications of productivity shocks in a model where agents observe the aggregate level of productivity but not its permanent and transitory components separately. The model's predictions under learning differ substantially from those under full information and are in line with several empirical findings: (i) the response of investment to a permanent shock is sluggish and peaks with delay; (ii) permanent shocks generate positive rather than negative savings on impact; and (iii) saving and investment are highly correlated despite the assumption of capital mobility. Unlike other standard explanations of the Feldstein-Horioka puzzle, learning induces high correlations irrespective of the assumed persistence of shocks. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2004/088 Full text available on IMF http://elibrary.imf.org/view/journals/001/2004/088/001.2004.issue-088-en.xml IMF e-Library