This paper shows that negative comovements between major macroeconomic variables at business-cycle frequencies are commonly observed, but that standard Real Business Cycle (RBC) theory fails to predict this feature of the data. We show that allowing for ``anticipation effects'' in response to...

The deterministic extended-path method for solving dynamic stochastic optimization problems approximates conditional expectations instead of approximating a model's complex non-linear dynamics. We show that this straightforward approach provides similar accuracy to the best results reported for...

This paper points out that negative comovements between macroeconomic aggregates are commonly observed in US data and that this is not explained by conventional business cycle models which emphasize positive comovements only. We discuss how these facts can be readily explained in simple...

We show that the deterministic Extended-Path (EP) method of Fair and Taylor (1983) solves standard dynamic stochastic general equilibrium models with similar accuracy to the best results reported in the literature for alternative methods. The EP method demands more computer time than other...

There is a growing effort to view water resource allocation from a perspective which incorporates consumers' preferences along with the supply constraints into management plans. This paper examines the structure of water users' preferences, the structure of the cost of supply and the appropriate...

Standard real business cycle (RBC) theory assumes that changes in economic conditions are unanticipated. We argue that upcoming changes are often well anticipated. Employing the RBC methodology to evaluate models when changes in economic conditions are fully anticipated provides evidence on the...