Teaching Real Business Cycles to Undergraduates
AbstractWe start by reviewing the graphical approach to teaching the real business cycle model introduced in Barro (1984). We then look at where this approach cuts corners and suggest refinements. Finally, graphical and exact models are compared 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. Used 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 results that will survive closer scrutiny later in the curriculum.
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Bibliographic InfoPaper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2004 with number 2004-05.
Length: 35 pages
Date of creation: Jan 2004
Date of revision:
Undergraduate teaching; macroeconomics; real business cycles; fluctuations;
Other versions of this item:
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-08-23 (All new papers)
- NEP-DGE-2004-08-23 (Dynamic General Equilibrium)
- NEP-MAC-2004-08-23 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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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