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Two-country applications of equilibrium business cycle methodology have succeeded in matching some key features of international fluctuations. However, discrepancies between theory and data remain. This paper identifies an anomaly related to a basic property of typical models: The prediction of...
Persistent link: https://www.econbiz.de/10014588359
Abstract The technology growth trends that underlie recent productivity patterns are investigated in a framework that incorporates investment-specific technological progress. Structural-break tests and regime-shifting models reveal the presence of a downward shift in total factor productivity...
Persistent link: https://www.econbiz.de/10014588460
This paper considers transition dynamics associated with a change in the rate of technological progress, using a general equilibrium framework that incorporates stochastic technology growth trends. The model suggests that these dynamics are associated with protracted transition periods,...
Persistent link: https://www.econbiz.de/10005085533
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General equilibrium models of international fluctuations that assume complete asset markets predict that consumption will be highly correlated across countries, while the data display correlations that are rather low. It has become common to characterize this empirical regularity by noting that...
Persistent link: https://www.econbiz.de/10005740526
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For over two decades, the FOMC has included in its policy decisions a statement of bias toward subsequent tightening or easing of policy. This article examines the predictive content of these statements in a Taylor-rule setting, finding that they convey useful information for forecasting changes...
Persistent link: https://www.econbiz.de/10005567980