We extend the basic RBC model to allow for biased technical changes. One broad definition of biased technical changes is changes that directly affect factor elasticities. Given the link between changes in factor elasticities and factor shares, observed fluctuations in US labor's share are...

Standard real business cycle models must rely on total factor productivity (TFP) shocks to explain the observed comovement of consumption, investment, and hours worked. This paper shows that a neoclassical model consistent with observed heterogeneity in labor supply and consumption can generate...

Standard real business cycle models must rely on total factor productivity (TFP) shocks to explain the observed comovement of consumption, investment, and hours worked. This paper shows that a neoclassical model consistent with observed heterogeneity in labor supply and consumption can generate...

Recent economic crisis started from the American Housing. In 2005, the price of housing started to grow and for gaining more profit, the banks inclined to housing and provided applicants with lots of facilities. With the burst of price bubbles, intense reduction of prices occurred in the housing...

The article offers a review of modern business cycle theory as developed in the first half of XX century. Marrama analyses the extent of economic literature on these topics, pinpointing the main strands of thought and tools used by business cycle economists. The categorization is set forth...

This paper studies the implications of heterogeneous capital gain expectations on output and asset prices. We consider a disequilibrium macroeconomic model where agents' expectations on future capital gains affect aggregate demand. Agents' beliefs take two forms - fundamentalist and chartist -...