Labor productivity growth is generally acknowledged to be procyclical. The author reviews the leading explanations for this, then uses two approaches to compare the time pattern of productivity gains over the business cycle. One approach describes the pattern in terms of the number of quarters...

The current recovery has seen steady growth in output but no corresponding rise in employment. A look at layoff trends and industry job gains and losses in 2001-03 suggests that structural change - the permanent relocation of workers from some industries to others - may help explain the stalled...

These articles were presented at a conference in December 2004, convened to consider the disparity in job growth between the United States and Canada-namely, while the United States was struggling to create jobs, the number of Canadian jobs was increasing. The conference was cosponsored by the...

An analysis of the quantitative effects of agency costs in a real business cycle model, showing that these costs can explain why output growth displays positive autocorrelation at short horizons.

Changes in net lending hide the much larger and more variable gross lending flows. We present a series of stylized facts about gross loan flows and how they vary over time, bank size, and the business cycle. We look at both the intensive (increases and decreases) and extensive (entry and exits)...

An empirical and theoretical analysis of how changes in the monetary policy function affect the covariance structure of macroeconomic data.

The authors seek to measure the potential benefit of reducing the likelihood of economic crises (defined as Depression-style collapses of economic activity). Based on the observed frequency of Depression-like events, they estimate this likelihood to be approximately one in every 83 years for the...

This paper integrates money into a real model of agency costs. Money is introduced by imposing a cash-in-advance constraint on a subset of transactions. The underlying real model is a standard real-business-cycle model modified to include endogenous agency costs. The paper’s chief contribution...

Using “business cycle accounting,” Chari, Kehoe, and McGrattan (2006) conclude that models of financial frictions which create a wedge in the intertemporal Euler equation are not promising avenues for modeling business cycle dynamics. There are two reasons that this conclusion is not...

An exogenous oil price shock raises inflation and contracts output, similar to a negative productivity shock. In the standard New Keynesian model, however, this does not generate any trade-off between inflation and output gap volatility: under a strict inflation-targeting policy, the output...