To analyze whether oil price can account for the business cycle asymmetries in the G7, this paper adopts the Friedman’s Plucking Markov Switching Model to decompose G7 real GDPs into common permanent components, common transitory components, infrequent Markov Switching negative shock and...

Macroeconomic time series are often obtained as an aggregate across regions or economic sectors. Even when the ultimate goal is to forecast the aggregate series it may be beneficial to consider the underlying disaggregate series. This especially holds when the disaggregate series are generated...

The inability of a wide array of dynamic stochastic general equilibrium (DSGE) models to generate fluctuations that resemble actual business cycles has lead to the use of habit formation in consumption. For example, habit formation has been shown to help explain the negative response of labour...

Abstract: The paper analyzes cyclical comovements in the Mercosur area differentiating idiosyncratic from common shocks. In the Mercosur (or any region for that matter) shocks can be country-specific, affecting only one country or a specific set of countries (for example, a weather-related...

This paper uses the neoclassical growth model to identify the effects of technological change on the US business cycle. In the model there are two sources of technological change: neutral, which affects the production of all goods homogeneously, and investment-specific. Investment-specific...

This paper adopts Friedman’s Plucking Markov Switching Model to decompose G7 real GDPs into common permanent components, common transitory components, infrequent Markov Switching negative shock and domestic idiosyncratic components. The findings show that the common components explain a...

In this paper we adopt Granovetter's view expressed in his famous article ''Economic Action and Social Structure: The Problem of Embeddedness'' , where he argues that the concept of man in economics is extremely undersocialized because it ignores the importance of social networks. In so doing...

The importance of social trust on economic growth has been suggested by many empirical works. This paper formalizes the concept of social trust and studies its formation process in a game theoretic setting. It provides plausible explanations for a wide range of empirical and experimental...