Many countries have a large informal economy that is poorly measured in the national accounts. I develop a two-sector small open economy business cycle model where one sector is formal and the other is informal, and explore the effect that the informal sector has on measured business cycles. I...

In this paper, by utilizing the Poincaré–Bendixson theory and the Hopf bifurcation theory, we analyze both rigid-price and flexible-price nonlinear disequilibrium Keynesian macroeconomic systems, prove the existence of a persistent business cycle and derive the conditions for global...

We use a standard quantitative business cycle model with nominal price and wage rigidities to estimate two measures of economic inefficiency in recent U.S. data: the output gap---the gap between the actual and efficient levels of output---and the labor wedge---the wedge between households'...

We use a standard quantitative business cycle model with nominal price and wage rigidities to estimate two measures of economic inefficiency in recent U.S. data: the output gap - the gap between the actual and efficient levels of output - and the labor wedge - the wedge between households'...

This paper investigates the differences between real-time and ex-post output gap estimates using a newly-constructed international real-time dataset over the period from 1973:Q1 to 2012:Q3. We extend the findings in Orphanides and van Norden (2002) for the United States that the use of ex-post...

This paper examines the relationship between real output and real credit at business-cycle frequencies in Greece. The Granger causality tests indicate that real credit is important to understanding future movements in real output, given the trade deficit ratio. The impulse response analysis...

This paper evaluates the relative importance of commodity price shocks in the U.S. business cycle. Therefore, we extend the standard set of business cycle shocks to include unexpected changes in commodity prices. The resulting SVAR shows that commodity price shocks are a very important driving...

It is often believed that governments should either abstain from leading activist policies, or if they lead such policies, that these policies should somehow be “stabilizing”, in the sense of reducing the volatilities of some endogenous variables. We construct a model with explicit...

Purpose–This paper aims to study the formation and amplification mechanism of the financial crisis and business cycle and also discuss the related optimal rules for the central bank and government. Design/methodology/approach–This study is developed basically on a simple financial business...