Showing 91 - 100 of 5,972
It is often believed that governments should either abstain from leading activist policies, or if they lead such policies, that these policies should somehow be “stabilizing”, in the sense of reducing the volatilities of some endogenous variables. We construct a model with explicit...
Persistent link: https://www.econbiz.de/10011051961
Countercyclical markups are a key transmission mechanism in many endogenous business cycle models. Yet, recent findings suggest that aggregate markups in the US are procyclical. The current model addresses this issue. It extends Galí's (1994) composition of aggregate demand model by endogenous...
Persistent link: https://www.econbiz.de/10011051990
Recent work in international finance suggests that exchange rate puzzles can be accounted for if (1) aggregate uncertainty is time-varying, and (2) countries have heterogeneous exposures to a world aggregate shock. We embed these features in a standard two-country real business cycle framework,...
Persistent link: https://www.econbiz.de/10011056319
A popular interpretation of the Rational Expectations/Efficient Markets hypothesis states that, if it holds, market valuations must follow a random walk; hence, the hypothesis is frequently criticized on the basis of empirical evidence against such a prediction. Yet this reasoning incurs what we...
Persistent link: https://www.econbiz.de/10010954775
What is the output gap? I discuss three alternative definitions: the deviation of output from its long-run stochastic trend (i.e., the “Beveridge–Nelson cycle”); the deviation of output from the level consistent with current technologies and normal utilization of capital and labor input...
Persistent link: https://www.econbiz.de/10011065293
We propose the analysis of the dynamics of the standard deviation of business cycles across euro area countries in order to evaluate the patterns of cyclical convergence in the European Monetary Union for the period 1960–2008. We identify significant business cycle divergence taking place in...
Persistent link: https://www.econbiz.de/10011065325
An important issue facing policymakers is the degree to which fluctuations in economic activity affect employment in large and small businesses across sectors and regions. This issue is particularly relevant for developing countries as it matters for the understanding of the labour market...
Persistent link: https://www.econbiz.de/10011065332
We document the properties of business cycles of 71 countries (23 industrial countries and 48 emerging market economies, or EMEs), from 1970q1 to 2012q4 using the Harding and Pagan dating algorithm. First, recessions are deeper, steeper and costlier among EMEs (especially in East Asia and Latin...
Persistent link: https://www.econbiz.de/10011065907
Many countries have a large informal economy that is poorly measured in the national accounts. I develop a two-sector small open economy business cycle model where one sector is formal and the other is informal, and explore the effect that the informal sector has on measured business cycles. I...
Persistent link: https://www.econbiz.de/10010931008
Aggregate fluctuations in emerging countries are different from those in developed countries. Using data from Mexico and Canada, this paper decomposes these differences in terms of reduced form shocks that affect aggregate efficiency and distort the decisions of households about how much to...
Persistent link: https://www.econbiz.de/10010931447