We dissect the comovement patterns of the macroeconomic data, identify a single shock that accounts for the bulk of the business-cycle volatility in the key quantities, and use its empirical properties to appraise parsimonious models of the business cycle. Through this lens, the data appears to...

We introduce a growth model of technology diffusion and endogenous Total Factor Productivity (TFP) levels both at the sector and aggregate level. At the aggregate, the model behaves as the Neoclassical growth model. Our goal is for this model to bridge the gap between the theoretical and...