This paper argues that the basic model of the ‘modern’ view of macroeconomics appears to be a poor approximation of the actual economy.

In this paper, we incorporate a marketing technology into a dynamic stochastic general equilibrium model by assuming a matching friction for consumption. An improvement in matching can be interpreted as an increase in matching technology, which we call marketing technology because of similar properties. Using a simulation analysis, we confirm that a positive matching technology shock can increa...

Modern neoclassical business cycle theories posit that the observed fluctuations in consumption and employment correspond to decisions of an optimizing representative individual. We estimate three first-order conditions that represent three tradeoffs faced by such an optimizing individual. He can trade off present for future consumption, present for future leisure, and present consumption for p...

This paper discusses the uses of copulas for modelling multivariate density functions and explains how copula methods can be applied to the study of macroeconomic relationships. It suggests that copulas are well suited to the study of these relationships and can sometimes shed new light on them. It then sets out the main steps of copula methodology and provides an illustrative application to th...

This chapter develops a toolkit of neoclassical macroeconomic models, and applies these models to the U.S. economy from 1929 through 2014. We first filter macroeconomic time series into business cycle and long-run components, and show that the long-run component is typically much larger than the business cycle component. We argue that this empirical feature is naturally addressed within neoclas...