We build an equilibrium business cycle model in which agents cannot perfectly distinguish between the permanent and transitory components of TFP shocks and learn about those components using the Kalman filter. Calibrated to Mexico, the model predicts a higher variability of consumption relative...

We build an equilibrium business cycle model in which agents cannot perfectly distinguish between the permanent and transitory components of TFP shocks and learn about those components using the Kalman filter. Calibrated to Mexico, the model predicts a higher variability of consumption relative...

This paper investigates the aggregate fluctuations in production and demand components when a firm's investment decision takes the form of (S,s) policies. In the field of large-dimensional non-linear dynamical systems, it is a commonly accepted view that a system of coupled non-linear...

This paper examines evidence of long- and short-run co-movement in Canadian sectoral output data. Our framework builds on a vector-error-correction representation that allows to test for and compute full-information maximum-likelihood estimates of models with codependent cycle restrictions. We...

In this paper we analyse to what extend movements in oil prices can help to explain business cycle fluctuations in Germany. To clarify whether oil price shocks have effects on real economic activity in Germany at all we use two different versions of a real business cycle model namely a closed...

Several papers have documented how the reaction function of the U.S. monetary authority has been passive, and destabilising, before Volcker"s appointment, and active and stabilising since then. In this paper we first compare the two sub-periods in terms of several key business-cycle 'stylised...