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Business Cycles, Investment Shocks, and the "Barro-King" Curse

Ascari, Guido - 2017

short-run contractionary effect a positive investment shock on consumption. Such counterfactual co-movements are typical of … on impact of a positive investment shock …Recent empirical evidence identifies investment shocks as key driving forces behind business cycle fluctuations …

Persistent link: https://www.econbiz.de/10012966936

How Important are Terms of Trade Shocks?

Schmitt-Grohé, Stephanie - 2015

According to conventional wisdom, terms of trade shocks represent a major source of business cycles in emerging and poor countries. This view is largely based on the analysis of calibrated business-cycle models. We argue that the view that emerges from empirical SVAR models is strikingly...

Persistent link: https://www.econbiz.de/10013021464

Trade Openness, Investment Instability and Terms-of-Trade Volatility

Razin, Asaf; Tsadḳah, Efrayim; Coury, Tarek - 2022

In the presence of economies of scale in the investment technology, trade openness may have non-conventional effects on … the level of investment, its cyclical behavior, and the volatility of the terms of trade. Trade openness may lead to boom …-bust cycles of investment supported by self-fulfilling expectations. The economy may oscillate between 'optimistic' expectations …

Persistent link: https://www.econbiz.de/10013292454

Business Cycles with a Common Trend in Neutral and Investment-Specific Productivity

Schmitt-Grohé, Stephanie - 2010

investment-specific productivity. We document that in U.S. postwar quarterly data total factor productivity (TFP) and the … relative price of investment are cointegrated. We show theoretically that TFP and the relative price of investment are … cointegrated if and only if neutral and investment-specific productivity share a common stochastic trend. We econometrically …

Persistent link: https://www.econbiz.de/10013142289

News Shocks

Barsky, Robert B. - 2009

of aggregate technology and several forward-looking variables, we identify the news shock as the shock orthogonal to …

Persistent link: https://www.econbiz.de/10013156463

Uncertainty Shocks and Business Cycle Research

Fernández-Villaverde, Jesús; Guerrón-Quintana, Pablo A. - 2022

We review the literature on uncertainty shocks and business cycle research. First, we motivate the study of uncertainty shocks by documenting the presence of time-variation in the volatility of macroeconomic time series. Second, we enumerate the mechanisms that researchers have postulated to...

Persistent link: https://www.econbiz.de/10014101580

Labor Supply and Aggregate Fluctuations

Hall, Robert E. - 2021

Issues of labor supply are at the heart of macroeconomic explanations of the large cyclical fluctuations of output observed in modern economies. This paper starts with a serious empirical examination of the view that the labor market is always in balance-that every observed combination of...

Persistent link: https://www.econbiz.de/10013218728

Are Cyclical Fluctuations in Productivity Due More to Supply Shocks or Demand Shocks?

Shapiro, Matthew D. - 2021

Measured productivity is strongly procyclical. Real business cycle theories suggest that actual fluctuations in productivity are the source of fluctuations in aggregate output. Keynesian theories maintain that fluctuations in aggregate output come from shocks to aggregate demand. Keynesian...

Persistent link: https://www.econbiz.de/10013227898

Sources of Business Cycle Fluctuations

Shapiro, Matthew D. - 2010

What shocks account for the business cycle frequency and long run movements of output and prices? This paper addresses this question using the identifying assumption that only supply shocks, such as shocks to technology, oil prices, and labor supply affect output in the long run. Real and...

Persistent link: https://www.econbiz.de/10013139739

Optimal Fiscal Policy in a Business Cycle Model

Chari, Varadarajan V. - 2012

This paper develops the quantitative implications of optimal fiscal policy in a business cycle model. In a stationary equilibrium the ex ante tax rate on capital income is approximately zero. There is an equivalence class of ex post capital income tax rates and bond policies that support a given...

Persistent link: https://www.econbiz.de/10013114944