News, noise, and Indian business cycle

Business Cycle Accounting of the Indian Economy

Can we use neoclassical growth model to single out the important transmission channels through which primitives a¤ected the Indian economy and caused the remarkable growth of the period 1982 to 2002? In this paper, we answer the question by applying the new technique of business cycle accounting to the Indian economy. Business cycle accounting procedure is based on the idea that primitives a¤ec...

Observed Expectations, News Shocks, and the Business Cycle

Abstract. This paper exploits information from the term structure of survey expectations to identify news shocks in a a DSGE model with rational expectations. We estimate a structural business-cycle model with price and wage stickiness. We allow for both unanticipated and anticipated components (“news”) in each structural disturbance: neutral and investment-specific technology shocks, governmen...

Can News About the Future Drive the Business Cycle?∗

We propose a model that generates an economic expansion following good news about future total factor productivity (TFP) or investmentspecific technical change. The model has three key elements: variable capital utilization, adjustment costs to investment, and preferences that exhibit a weak short-run wealth effect on the labor supply. These preferences nest, as special cases, the two classes o...

Bad News for News Shocks? The Expectational-Stability and Comovement Tradeoff in a News-Driven Business Cycle Model

This paper investigates whether adaptive learning and news shocks, operating in tandem, can generate business cycle dynamics that match the data. In doing so, this paper adopts expectational stability (“E-stability”) as a natural criterion for rationality: plausible equilibria should arise from an adaptive learning formulation where agents form forecasts from a correctly specified model whose p...

Business Cycle Features In The Iranian Economy