In part, this shift in the profession’s conception of what needs to be explained about business fluctuations reflects a desire to integrate the determinants of long-run economic growth and the causes of short-run economic downturns within a single unified theory of aggregate economic performance. Since improvements in overall productivity are widely acknowledged to be one of the key factors dri...

One of the basic tenets in recent international trade literature is about the effect of trade integration on business cycle synchronization (BCS) among trading countries. The objective of this paper is to explore the main determinants of business cycle synchronization, with emphasis on trade integration. To this end, we have specified two simultaneous regression equations which were estimated b...

We provide predictions for DSGE models with incomplete information that are robust across structures. Our approach maps an incomplete-information model into a full-information economy time-varying expectation wedges and provides conditions ensure the rationalizable by some structure. Using our approach, we quantify potential importance of as source business cycle fluctuations in otherwise frict...

The Dynamics of Entrepreneurship: Hysteresis, Business Cycles and Government Policy This paper estimates an unobserved components model to explore the macro dynamics of entrepreneurship in Spain and the US. We ask whether entrepreneurship exhibits hysteresis, defined as a macro dynamic structure in which cyclical fluctuations have persistent effects on the natural rate of entrepreneurship. We f...

The Real Business Cycle (RBC) research program has grown spectacularly over the last decade, as its concepts and methods have diffused into mainstream macroeconomics. Yet, there is increasing skepticism that technology shocks are a major source o f business fluctuations. This chapter exposits the basic RBC model and shows that it requires large technology shocks to produce realistic business cy...