King, Robert; Rebelo, Sergio T. - National Bureau of Economic Research (NBER) - 2000
The Real Business Cycle (RBC) research program has grown spectacularly over the last decade, as its concepts and … source of business fluctuations. This chapter exposits the basic RBC model and shows that it requires large technology shocks … to produce realistic business cycles. While Solow residuals are sufficiently volatile, these imply frequent technological …