Evidences from the structural vector-error correction model shows that the new business formation and stock prices co-moves with output under news shocks. However, simply incorporating firm dynamics into Jaimovich and Rebelo's (Jaimovich and Rebelo, 2009) model cannot explain these empirical...

In this note, we revisit the univariate unobserved-component (UC) model of US GDP by relaxing the traditional random-walk assumption of the permanent component. Since our general UC model is unidentified, we investigate the upper bound of the contribution of the transitory component, and find it...

In the Chinese urban data, there is a stronger relationship between consumer behavior (measured by consumption income ratio or cy ratio) and consumer confidence (measured by Consumer Confidence Index or CCI), which implies expectation about the future plays an important role in domestic demand....

In this article, we revisit the univariate unobserved-component (UC) model of the US GDP by relaxing the traditional random-walk assumption of the permanent component. Since our general UC model is unidentified, we investigate the upper bound of the contribution of the transitory component, and...

We estimate a DSGE model with (S,s) inventory policies. We find that (i) taking inventories into account can significantly improve the empirical fit of DSGE models in matching the standard business-cycle moments (in addition to explaining inventory fluctuations); (ii) (S,s) inventory policies...

Our structural VAR shows that the new business formation in U.S. data has similar positive co-movement pattern as common aggregate variables in response to a favorable anticipated shock about technology. However, incorporating �firm dynamics into Jaimovich and Rebelo's (Jaimovich and Rebelo,...

Conventional wisdom has it that inventory investment destabilizes the economy because it is procyclical to sales. Khan and Thomas (2007) show that the conventional wisdom is wrong in a general equilibrium (S,s) model with capital. We argue that their finding is not robust—the conventional...

We estimate a DSGE model with (S,s) inventory policies. We find that (i) taking inventories into account can significantly improve the empirical fit of DSGE models in matching the standard business-cycle moments (in addition to explaining inventory fluctuations); (ii) (S,s) inventory policies...