News and Aggregate Demand Shocks
AbstractIn this review, I look at the recent literature on news as a source of economic fluctuations. The main question in this literature is: how does the aggregate economy respond to a shock that raises consumers' and firms' expectations about future productivity growth? I discuss how different papers have addressed this question, emphasizing the mechanisms at work under different specifications of preferences and technology, under different assumptions about nominal and real rigidities, and under different assumptions about the agents' information structure. I also briefly discuss some challenges faced by the empirical literature on the topic.
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Bibliographic InfoArticle provided by Annual Reviews in its journal Annual Review of Economics.
Volume (Year): 3 (2011)
Issue (Month): 1 (09)
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Find related papers by JEL classification:
- E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
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- Paul Beaudry & Franck Portier, 2013.
"News Driven Business Cycles: Insights and Challenges,"
NBER Working Papers
19411, National Bureau of Economic Research, Inc.
- Beaudry, Paul & Portier, Franck, 2013. "News Driven Business Cycles: Insights and Challenges," CEPR Discussion Papers 9624, C.E.P.R. Discussion Papers.
- Michael Rousakis, 2013. "Expectations and Fluctuations: The Role of Monetary Policy," 2013 Meeting Papers 681, Society for Economic Dynamics.
- Favilukis, Jack & Lin, Xiaoji, 2013.
"Long run productivity risk and aggregate investment,"
Journal of Monetary Economics,
Elsevier, vol. 60(6), pages 737-751.
- Favilukis, Jack & Lin, Xiaoji, 2012. "Long Run Productivity Risk and Aggregate Investment," Working Paper Series 2012-14, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
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