Multiple-equilibria macroeconomic models suggest that consumers and investors' perceptions about the state of the economy may be important independent factors for business cycles. In this paper, we examine empirically the interrelations between waves of optimism and pessimism and subsequent...

Multiple-equilibria macroeconomic models suggest that consumers and investors' perceptions about the state of the economy may be important independent factors for business cycles. In this paper, we examine empirically the interrelations between waves of optimism and pessimism and subsequent...

Standard real business cycle models must rely on total factor productivity (TFP) shocks to explain the observed comovement of consumption, investment, and hours worked. This paper shows that a neoclassical model consistent with observed heterogeneity in labor supply and consumption can generate...

Standard real-business-cycle models must rely on total factor productivity (TFP) shocks to explain the observed co-movement between consumption, investment and hours worked. This paper shows that a neoclassical model consistent with observed heterogeneity in labor supply and consumption, can...