Real business cycles in open economies

This paper surveys recent literature on real business cycles in open econom ies. It focuses on the empirical regularities of international macroeconomi c fluctuations and provides a short discussion of the differences between t he,,stylized facts" of business cycles in advanced and in developing countr ies. The paper reviews various real-business-cycle models, discerning one-s ector models from their multi-good modifications. It also highlights discre pancies between theoretical predictions and data, such as "consumption/outp ut correlation puzzle", "investment correlation puzzle", and price anomaly" . The paper concludes with a brief consideration of prospective directions for future research.