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Measuring Business Cycles: The Real Business Cycle Approach and Related Controversies

Author

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  • Celsa Machado

    () (Instituto Superior de Contabilidade e Administração do Porto and Faculdade de Economia do Porto)

Abstract

This paper presents and discusses the business cycles measurement carried out by the real business cycle (RBC) approach. It shows how the controversy lodges within and outside the RBC frontiers. It also shows how the methodological debate that took place in the 1940s about the relationship between theory and measurement, is revived in modern discussions of business cycles measurement. The paper concludes that this relationship still raises fierce contention.

Suggested Citation

  • Celsa Machado, 2001. "Measuring Business Cycles: The Real Business Cycle Approach and Related Controversies," FEP Working Papers 107, Universidade do Porto, Faculdade de Economia do Porto.
  • Handle: RePEc:por:fepwps:107
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    References listed on IDEAS

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    1. Lawrence J. Christiano & Terry J. Fitzgerald, 1998. "The business cycle: it's still a puzzle," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q IV, pages 56-83.
    2. 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.
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    17. Hoover, Kevin D, 1995. "Facts and Artifacts: Calibration and the Empirical Assessment of Real-Business-Cycle Models," Oxford Economic Papers, Oxford University Press, vol. 47(1), pages 24-44, January.
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    Citations

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    Cited by:

    1. Ana Paula Delgado & Isabel Maria Godinho, 2004. "The evolution of city size distribution in Portugal: 1864-2001," FEP Working Papers 151, Universidade do Porto, Faculdade de Economia do Porto.
    2. Rosa Forte, 2004. "The relationship between foreign direct investment and international trade. Substitution or complementarity? A survey," FEP Working Papers 140, Universidade do Porto, Faculdade de Economia do Porto.
    3. Kapounek, Svatopluk, 2009. "Estimation of the Business Cycles - Selected Methodological Problems of the Hodrick-Prescott Filter Application," MPRA Paper 27567, University Library of Munich, Germany.
    4. Maria do Rosario Correia & Scott C. Linn & Andrew Marshall, 2004. "An Empirical Investigation of Debt Contract Design: The Determinants of the Choice of Debt Terms in Eurobond Issues," FEP Working Papers 148, Universidade do Porto, Faculdade de Economia do Porto.
    5. Gachet, Ivan & Maldonado, Diego & Oliva, Nicolas & Ramirez, Jose, 2011. "Hechos Estilizados de la Economía Ecuatoriana: El Ciclo Económico 1965-2008
      [Stylized Facts of the Ecuadorian Economy: The Economic Chicle 1965-2008]
      ," MPRA Paper 30280, University Library of Munich, Germany.

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