This paper studies quantitative implications of model economies that exhibit multiple equilibria. The goal is to assess two interrelated issues. First, do economies with multiple equilibria have falsifiable predictions? Second, is identification possible in economies that exhibit multiple...

This paper looks at recent advances in the study of aggregate fluctuations. Our emphasis is on three prominent areas of research: the stochastic growth model, economies which exhibit macroeconomic complementarities and models that emphasize heterogeneity. Each section of the paper outlines the...