Theory ahead of business cycle measurement
Abstract: Recent developments in business cycle theory are reviewed. The principal finding is that the growth model, which was developed to account for the secular patterns in important economic aggregates, displays the business cycle phenomena once it incorporates the observed randomness in the rate of technological advance. The amplitudes and serial correlation properties of fluctuations in output and employment that the growth model predicts match those historically experienced in the United States. Further, the model continues to display the growth facts it was developed to explain.
Keywords: Business cycles;
Status: Published in Quarterly Review, Fall 1986
File(s): File format is application/pdf http://www.minneapolisfed.org/research/common/pub_detail.cfm?pb_autonum_id=383
Provider: Federal Reserve Bank of Minneapolis
Part of Series: Staff Report
Publication Date: 1986