Business cycle measurement with some theory

Theory Ahead of Business Cycle Measurement

Economists have long been puzzled by the observations that during peacetime industrial market economies display recurrent, large fluctuations in output and employment over relatively short time periods. Not uncommon are changes as large as 10 percent within only a couple of years. These observations are considered puzzling because the associated movements in labor's marginal product are small. ...

On Some Computational Aspects of Equilibrium Business Cycle Theory*

It has been common practice in the recent Real Business Cycle (RBC) literature to approximate, quadratically, the return function about the steady state and then to use this approximate return function as the basis for generating the economy's equilibrium time series. This is done for well-known reasons of analytic and computational simplicity: with a quadratic return function the decision rule...

Some Skeptical Observations on Real Business Cycle Theory

Test of Real Business Cycle Theory in Iran's economy

This paper tests the importance of real shocks as sources of fluctuations in iran’s economy. For this purpose, based on the work of Boschen and Mills, a set of non-monetary variables which can affect economic growth have been selected and by using an illustrative business cycle model in which the production depends on the past and current value of real shocks, the influence 01’ these variables ...

Business Cycle Theory and Econometrics

We outline in turn criticisms made by econometricians of the methods used in empirical business-cycle research and then criticisms made by business-cycle researchers of some methods used by econometricians. The aim is to clarify and in some cases correct these criticisms. Overall there is no conflict in using rigourous statistical procedures to study modern dynamic stochastic general equilibriu...