Do worries never cease? Now that the Federal Reserve has reduced the federal funds rate to a four-decade low, responding to economic weakness that continued longer than most economists predicted, a new villain has appeared. Sometimes identified as deflation, sometimes as a liquidity trap, the...

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.

This paper studies the international transmission of business cycles by developing a two-country real business-cycle model and confronting it with a broad set of empirical observations. These observations include variances and covariances of output, labor, consumption, employment, and investment...

This paper studies the international transmission of business cycles by developing a two-country real business-cycle model and confronting it with a broad set of empirical observations. These observations include variances and covariances of output, labor, consumption, employment, and investment...