Post-war business cycle fluctuations of output and inflation are remarkably persistent. Many recent sticky-price models, however, grossly underpredict this persistence. We assess whether adding inventories to a standard sticky-price model raises the persistence of output and inflation. For this...

We study the contributions of global and country-specific shocks to international business cycles. To do so, we decompose technology and government expenditures for the US and an aggregate of non-US G7 countries into global and country-specific components using a Kalman-filter procedure. We then...