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Modeling inventories over the business cycle

Khan, Aubhik; Thomas, Julia K. - Federal Reserve Bank of Minneapolis - 2004

We evaluate two leading models of aggregate fluctuations with inventories in general equilibrium: the (S,s) model and … the stockout avoidance model. Each is judged by its ability to explain the observed magnitude of inventories in the U … correlation with sales. We find that the (S,s) model is far more consistent with the behavior of aggregate inventories in the …

Persistent link: https://www.econbiz.de/10004993835

Inventories and the business cycle: an equilibrium analysis of (S,s) policies

Khan, Aubhik; Thomas, Julie K. - Federal Reserve Bank of Minneapolis - 2003

comovement between inventory investment and final sales is often interpreted as evidence that inventories amplify aggregate … inventories, though we do observe somewhat higher variability in employment, and lower variability in consumption and investment …. Thus, our equilibrium analysis reveals that the presence of inventories does not substantially raise the cyclical …

Persistent link: https://www.econbiz.de/10005712358

Macroeconomic Volatility and External Imbalances

Fogli, Alessandra; Perri, Fabrizio - Federal Reserve Bank of Minneapolis - 2015

Does macroeconomic volatility/uncertainty affect accumulation of net foreign assets? In OECD economies over the period 1970-2012, changes in country specific aggregate volatility are, after controlling for a wide array of factors, significantly positively associated with net foreign asset...

Persistent link: https://www.econbiz.de/10011277951

Sticky price models of the business cycle: can the contract multiplier solve the persistence problem?

Chari, V. V.; Kehoe, Patrick J.; McGrattan, Ellen R. - Federal Reserve Bank of Minneapolis - 1998

We construct a quantitative equilibrium model with price setting and use it to ask whether with staggered price setting monetary shocks can generate business cycle fluctuations. These fluctuations include persistent output fluctuations along with the other defining features of business cycles,...

Persistent link: https://www.econbiz.de/10005367611

Is lumpy investment relevant for the business cycle?

Thomas, Julia K. - Federal Reserve Bank of Minneapolis - 2002

Previous research has suggested that discrete and occasional plant-level capital adjustments have significant aggregate implications. In particular, it has been argued that changes in plants? willingness to invest in response to aggregate shocks can at times generate large movements in total...

Persistent link: https://www.econbiz.de/10005367617

Can the Mortonson-Pissarides matching model match the business cycle facts?

Cole, Harold L.; Rogerson, Richard - Federal Reserve Bank of Minneapolis - 1996

We examine whether the Mortensen-Pissarides matching model can account for the business cycle facts on employment, job creation, and job destruction. A novel feature of our analysis is its emphasis on the reduced-form implications of the matching model. Our main finding is that the model can...

Persistent link: https://www.econbiz.de/10005367620

Theory ahead of business cycle measurement

Prescott, Edward C. - Federal Reserve Bank of Minneapolis - 1986

Recent developments in business cycle theory are reviewed. The principal finding is that the growth model, which was developed to account for the secular patterns in important economic aggregates, displays the business cycle phenomena once it incorporates the observed randomness in the rate of...

Persistent link: https://www.econbiz.de/10005367663

Comparing alternative representations and alternative methodologies in business cycle accounting

Chari, V. V.; Kehoe, Patrick J.; McGrattan, Ellen R. - Federal Reserve Bank of Minneapolis - 2007

We make three comparisons relevant for the business cycle accounting approach. We show that in theory, representing the investment wedge as a tax on investment is equivalent to representing this wedge as a tax on capital income as long as the probability distributions over this wedge in the two...

Persistent link: https://www.econbiz.de/10005367678

Can there be short-period deterministic cycles when people are long lived?

Aiyagari, S. Rao - Federal Reserve Bank of Minneapolis - 1988

This paper considers whether short-period deterministic cycles can exist in a class of stationary overlapping generations models with long- (but finite-) lived agents. It shows that if agents discount the future positively, then as life spans get large, nonmonetary cycles will disappear....

Persistent link: https://www.econbiz.de/10005367680

Homework in macroeconomics: household production and aggregate fluctuations

Benhabib, Jess; Rogerson, Richard; Wright, Randall - Federal Reserve Bank of Minneapolis - 1991

This paper explores some macroeconomic implications of including household production in an otherwise standard real business cycle model. We calibrate the model based on microeconomic evidence and long run considerations, simulate it, and examine its statistical properties Our finding is that...

Persistent link: https://www.econbiz.de/10005367681