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The Network Origins of Large Economic Downturns

Acemoglu, Daron - 2013

This paper shows that large economic downturns may result from the propagation of microeconomic shocks over the input-output linkages across different firms or sectors within the economy. Building on the framework of Acemoglu et al. (2012), we argue that the economy's input-output structure can...

Persistent link: https://www.econbiz.de/10012459432

Stochastic Technical Progress, Nearly Smooth Trends and Distinct Business Cycles

Rotemberg, Julio J. - 2002

This paper investigates whether it is possible to entertain simultaneously two attractive views about US GDP. The first is that long term growth in US GDP is attributable to an empirically plausible specification of random technical progress. The second is that deviations of GDP from a fitted...

Persistent link: https://www.econbiz.de/10012469795

Is the Business Cycles a Necessary Consequence of Stochastic Growth?

Rotemberg, Julio J. - 1994

We compute the forecastable changes in output, consumption, and hours implied by a VAR that includes the growth rate of private value added, the share of output that is consumed, and the detrended level of private hours. We show that the size of the forecastable changes in output greatly exceeds...

Persistent link: https://www.econbiz.de/10012474286

Oligopolistic Pricing and the Effects of Aggregate Demand on Economic Activity

Rotemberg, Julio J. - 1989

We construct a dynamic general equilibrium model in which the typical industry colludes by threatening to punish deviations from an implicitly agreed upon pricing path. We argue that models of this type explain better than do competitive models the way in which the economy responds to aggregate...

Persistent link: https://www.econbiz.de/10012475831

Dynamics of Information Exchange in Endogenous Social Networks

Acemoglu, Daron - 2010

We develop a model of information exchange through communication and investigate its implications for information aggregation in large societies. An underlying state determines payoffs from different actions. Agents decide which others to form a costly communication link with incurring the...

Persistent link: https://www.econbiz.de/10012462246

Monetary Policy in the Open Economy Revisited : Price Setting and Exchange Rate Flexibility

Devereux, Michael B. - 2000

This paper develops a welfare-based model of monetary policy in an open economy. We focus on the extent to which monetary policy should be employed in maintaining the exchange rate. The traditional approach maintains that exchange rate flexibility is desirable in the presence of real...

Persistent link: https://www.econbiz.de/10012471102

Leverage Constraints and the International Transmission of Shocks

Devereux, Michael B. - 2010

Recent macroeconomic experience has drawn attention to the importance of interdependence among countries through financial markets and institutions, independently of traditional trade linkages. This paper develops a model of the international transmission of shocks due to interdependent...

Persistent link: https://www.econbiz.de/10012462429

Networks and the Macroeconomy : An Empirical Exploration

Acemoglu, Daron - 2015

the direct impact of a shock and the magnitudes of the downstream and the upstream indirect effects. We then investigate … through the input-output network, with a pattern broadly consistent with theory. Quantitatively, the network-based propagation …, capturing the fact that the local propagation of a shock to an industry will fall more heavily on other industries that tend to …

Persistent link: https://www.econbiz.de/10012457324

Capital Controls, Global Liquidity Traps and the International Policy Trilemma

Devereux, Michael B. - 2013

The 'International Policy Trilemma' refers to the constraint on independent monetary policy that is forced on a country which remains open to international financial markets and simultaneously pursues an exchange rate target. This paper shows that, in a global economy with open financial...

Persistent link: https://www.econbiz.de/10012459570

The Cyclical Behavior of Prices and Costs

Rotemberg, Julio J. - 1999

Because inputs are scarce, marginal cost should be an increasing function of output. Without changes in this real marginal cost schedule, aggregate output can vary if and only if the markup of price over marginal cost varies. In this review, we discuss the extent to which observed fluctuations...

Persistent link: https://www.econbiz.de/10012471902

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