government spending shock. In addition, the deep-habit model predicts that in response to an anticipated increase in government …

This paper analyzes the quality of VAR-based procedures for estimating the response of the economy to a shock. We focus … question that has attracted a great deal of attention in the literature: How do hours worked respond to an identified shock? In … all of our examples, as long as the variance in hours worked due to a given shock is above the remarkably low number of 1 …

We dissect the comovement patterns of the macroeconomic data, identify a single shock that accounts for the bulk of the …