Aggregate economic activity was heavily influenced by the construction sector's expansion, collapse, and failure to revive during the interwar years. The 1920s building boom was the first to respond to the potential of the automobile and the last to be largely unplanned. Its uncoordinated...

We show that, in a large class of models, market frictions lead to predictable dynamic patterns of the acquisition and subsequent shedding of inputs by firms. The logic is as follows. During high demand and expansionary periods, firms that fail to have inputs (machinery, labor, space, credit) in...

There has been much discussion of the differences in macroeconomic performance and prospects between the US, Japan and the euro area. Using Markov-switching techniques, in this paper we identify and compare specifically their major business-cycle features and examine the case for a common...

A number of authors have attemted to test whether the U.S. economy is in a determinate or an indeterminate equilibrium. We argue that to answer this question, one must be impose a priori restrictions on lag length that cannot be tested. We provide examples of two economic models. Model 1...

This paper analyses the information content of M1 for euro area real GDP since the beginning of the 1980s and reviews theoretical arguments on why real narrow money should help predict real GDP. We find that, unlike in the U.S., in the euro area, M1 has better and more robust forecasting...