Keynes vs. Prescott and Solow: Identifying Sources of Business Cycle Fluctuations
AbstractWho was closer to the source of business cycle fluctuations--Keynes or Prescott and Solow? Two types of business-cycle impulses which have been associated with their names -- marginal efficiency of investment shocks (Keynes) and technology shocks (Prescott and Solow) -- are studied here in a neoclassical model which builds on the Greenwood, Hercowitz, and Huffman (1988) variable-utilization framework. The important parameters of the model are estimated using a Bayesian procedure which accommodates prior uncertainty about their magnitudes; from these estimates, posterior distributions of the two shocks are obtained. The postwar U.S. experience suggests that both shocks are important in understanding fluctuations, but that investment shocks are primarily responsible for beginning and ending recessions. * The University of Pittsburgh ** The University of Iowa
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by EconWPA in its series Macroeconomics with number 9504002.
Date of creation: 12 Apr 1995
Date of revision: 18 Apr 1995
Note: Zipped using PKZIP v2.04, encoded using UUENCODE v5.15. Zipped file includes 2 files- (figures.doc, kvsdd330.doc)
Contact details of provider:
Web page: http://22.214.171.124
Other versions of this item:
- DeJong, D.N. & Ingram, B.F. & Whiteman, C.H., 1995. "Keynes vs. Prescott and Solow: Identifying Sources of Business Cycle Fluctuations," Working Papers 95-06, University of Iowa, Department of Economics.
- E - Macroeconomics and Monetary Economics
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.:
- Geweke, John, 1989. "Bayesian Inference in Econometric Models Using Monte Carlo Integration," Econometrica, Econometric Society, vol. 57(6), pages 1317-39, November.
- 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.
- Greenwood, Jeremy & Hercowitz, Zvi & Huffman, Gregory W, 1988. "Investment, Capacity Utilization, and the Real Business Cycle," American Economic Review, American Economic Association, vol. 78(3), pages 402-17, June.
- Ingram, B.F. & Kocherlakota, N.R. & Savin, N.E., 1992.
"Explaining Business Cycles : A Multiple Shock Approach,"
92-09, University of Iowa, Department of Economics.
- Ingram, Beth Fisher & Kocherlakota, Narayana R. & Savin, N. E., 1994. "Explaining business cycles: A multiple-shock approach," Journal of Monetary Economics, Elsevier, vol. 34(3), pages 415-428, December.
- Kydland, Finn E & Prescott, Edward C, 1982.
"Time to Build and Aggregate Fluctuations,"
Econometric Society, vol. 50(6), pages 1345-70, November.
- Finn E. Kydland & Edward C. Prescott, 1982. "Executable program for "Time to Build and Aggregate Fluctuations"," QM&RBC Codes 4, Quantitative Macroeconomics & Real Business Cycles.
- Finn E. Kydland & Edward C. Prescott, 1982. "Web interface for "Time to Build and Aggregate Fluctuations"," QM&RBC Codes 4a, Quantitative Macroeconomics & Real Business Cycles.
- Linnea Polgreen & Pedro Silos, 2005.
"Capital-skill complementarity and inequality: a sensitivity analysis,"
2005-20, Federal Reserve Bank of Atlanta.
- Linnea Polgreen & Pedro Silos, 2008. "Capital-Skill Complementarity and Inequality: A Sensitivity Analysis," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(2), pages 302-313, April.
- Beatriz Rumbos & Leonardo Auernheimer, 2001. "Endogenous capital utilization in a neoclassical growth model," Atlantic Economic Journal, International Atlantic Economic Society, vol. 29(2), pages 121-134, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA).
If references are entirely missing, you can add them using this form.