For the last two or three decades, the global economy has been going through an extraordinary transition phase. This period has been marked by stronger integration among economies, fuelled by falling trade and communication costs, but above all by the rising prominence of emerging market and...

A modification of existing sticky-wage models to account for the observed cyclical behavior of real wages by means of a model that introduces productivity factors into nominal-wage contracts.

An examination of the commonly accepted positive correlation between money and real output, including a review of several models of business cycles and an explanation of how money can be neutral and yet still appear to affect real output.

An evaluation of the state of real business cycle theory, with an outline of useful directions for further research and a discussion of economic policy implications.

A review of research on the relationship between inventory investment and business cycle fluctuations, focusing on the developments of the last 15 years. A central issue in the literature, the relative importance of demand and supply shocks as sources of fluctuations, continues to be debated.

Policy and investment decisions are made with an eye toward future economic conditions, and an econometric model that can correctly forecast directional changes in the business cycle would be a boon to policymakers, the business community, and the general public. This article provides some...

Inventories play an important role in business cycles. Inventory build-ups add momentum to the economy during expansions, while inventory liquidations sap economic strength during recessions. In addition, because inventory fluctuations are notoriously difficult to predict, they present...

Over the last 35 years, the U.S. economy has created service sector jobs at a faster pace than manufacturing sector jobs. Not only has this trend led to a significant shift in the composition of the labor force from manufacturing to services, but it has also fundamentally changed the...