Khan, Hashmat; Tsoukalas, John - In: Journal of Economic Dynamics and Control 35 (2011) 1, pp. 115-130
Recent work based on sticky price-wage estimated dynamic stochastic general equilibrium (DSGE) models suggests investment shocks are the most important drivers of post-World War II US business cycles. Consumption, however, typically falls after an investment shock. This finding sits oddly with...