The synthesis of the dynamic factor model of Stock and Watson (1989) and the regime-switching model of Hamilton (1989) proposed by Diebold and Rudebusch (1996) potentially encompasses both features of the business cycle identified by Burns and Mitchell (1946): (1) comovement among economic...

Studies of development and change in partisan fortunes in the US emphasize epochs of partisan stability, separated by critical events or turning points. A major empirical issue that has plagued the study of American political development is the estimation of the critical moments and durations of...

This paper investigates the relationship between permanent and transitory components of U.S. recessions in an empirical model allowing for business cycle asymmetry. Using a common stochastic trend representation for real GDP and consumption, we divide real GDP into permanent and transitory...

A large body of research suggests that uncertainty is an important factor affecting economic activity. Most earlier research, however, fails to consider the possibility that uncertainty may affect the value of new information and economic activity differently, depending upon its source. The...

We hope to answer three questions: Has there been a structural break in postwar U.S. real GDP growth towards stabilization? If so, when? What is the nature of this structural break? We employ a Bayesian approach to identify a structural break at an unknown changepoint in a Markov-switching model...