Teaching Real Business Cycles to Undergraduates
AbstractThe authors review the graphical approach to teaching the real business cycle model introduced in Barro. They then look at where this approach cuts corners and suggest refinements. Finally, they compare graphical and exact models by means of impulse-response functions. The graphical models yield reliable qualitative results. Sizable quantitative differences exist, but these can partly be remedied by adding appropriate refinements when taught by experienced instructors. The graphical analysis of the real business cycle equips students with a first understanding of the economy's supply side and generates dynamics that will survive closer scrutiny later in the curriculum.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal The Journal of Economic Education.
Volume (Year): 38 (2007)
Issue (Month): 2 (April)
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Web page: http://www.tandfonline.com/VECE20
Other versions of this item:
- Brevik Frode & Manfred Gärtner, 2004. "Teaching Real Business Cycles to Undergraduates," University of St. Gallen Department of Economics working paper series 2004 2004-05, Department of Economics, University of St. Gallen.
- A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
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- Long, John B, Jr & Plosser, Charles I, 1983. "Real Business Cycles," Journal of Political Economy, University of Chicago Press, vol. 91(1), pages 39-69, February.
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