Linear Rational Expectations Models was first published in 1983. The assumption that agents respond rationally to changes in their economic environment introduces complicated restrictions among equations of the economic model. So far, the technical problems created by those restrictions have...

This paper studies the changes in world business cycles during 1960-2003. We employ a Bayesian dynamic latent factor model to estimate common and country-specific components in the main macroeconomic aggregates of the Group of Seven (G-7) countries. We then quantify the relative importance of...