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Real business cycles: a legacy of countercyclical policies?

  • Satyajit Chatterjee

If business cycles are caused mostly by changes in productivity, rather than by monetary and financial disturbances, what role do monetary and fiscal policies play? In this article, Satyajit Chatterjee discusses the possibility that countercyclical monetary and fiscal policies have played an important role in reducing the severity of business cycles since World War II but that additional countercyclical policies that try to offset movements in productivity aren't likely to be beneficial

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Article provided by Federal Reserve Bank of Philadelphia in its journal Business Review.

Volume (Year): (1999)
Issue (Month): Jan ()
Pages: 17-27

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Handle: RePEc:fip:fedpbr:y:1999:i:jan:p:17-27
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  1. Edward C. Prescott, 1986. "Theory ahead of business cycle measurement," Staff Report 102, Federal Reserve Bank of Minneapolis.
  2. Kydland, Finn E & Prescott, Edward C, 1991. "Hours and Employment Variation in Business Cycle Theory," Economic Theory, Springer, vol. 1(1), pages 63-81, January.
  3. Plosser, C.I., 1989. "Understanding Real Business Cycles," Papers 89-03, Rochester, Business - General.
  4. Satyajit Chatterjee, 1995. "Productivity growth and the American business cycle," Business Review, Federal Reserve Bank of Philadelphia, issue Sep, pages 13-22.
  5. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-70, November.
  6. Balke, Nathan S & Gordon, Robert J, 1989. "The Estimation of Prewar Gross National Product: Methodology and New Evidence," Journal of Political Economy, University of Chicago Press, vol. 97(1), pages 38-92, February.
  7. Zarnowitz, Victor, 1992. "Business Cycles," National Bureau of Economic Research Books, University of Chicago Press, number 9780226978901, March.
  8. 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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