A progress report on business cycle models
This article reports the recent progress made by researchers trying to build business cycle models that can reliably reproduce aggregate U.S. time series. The article first describes some features of the U.S. data that the models are meant to reproduce. Then it describes a version of the standard business cycle model, along with the indivisible labor extension of that model, both of which assume that fluctuations in economic activity are caused only by shocks to technology. Finally, it describes a version of recent other extensions which assume that shocks to fiscal variables also contribute to the fluctuations. Adding fiscal shocks to standard business cycle models is shown to significantly improve their ability to mimic some of the data.
Volume (Year): (1994)
Issue (Month): Fall ()
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References listed on IDEAS
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- Rogerson, Richard, 1988.
"Indivisible labor, lotteries and equilibrium,"
Journal of Monetary Economics,
Elsevier, vol. 21(1), pages 3-16, January.
- Hansen, Gary D., 1985.
"Indivisible labor and the business cycle,"
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Elsevier, vol. 16(3), pages 309-327, November.
- Prescott, Edward C., 1986.
"Theory ahead of business-cycle measurement,"
Carnegie-Rochester Conference Series on Public Policy,
Elsevier, vol. 25(1), pages 11-44, January.
- Seater, John J., 1985. "On the construction of marginal federal personal and social security tax rates in the U.S," Journal of Monetary Economics, Elsevier, vol. 15(1), pages 121-135, January.
- 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. "Web interface for "Time to Build and Aggregate Fluctuations"," QM&RBC Codes 4a, Quantitative Macroeconomics & Real Business Cycles.
- 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.
- Anton Braun, R., 1994. "Tax disturbances and real economic activity in the postwar United States," Journal of Monetary Economics, Elsevier, vol. 33(3), pages 441-462, June.
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