Homework in macroeconomics: household production and aggregate fluctuations

Abstract: This paper explores some macroeconomic implications of including household production in an otherwise standard real business cycle model. We calibrate the model based on microeconomic evidence and long run considerations, simulate it, and examine its statistical properties Our finding is that introducing home production significantly improves the quantitative performance of the standard model along several dimensions. It also implies a very different interpretation of the nature of aggregate fluctuations.

Keywords: Business cycles;

Status: Published in Journal of Political Economy (Vol 99, Num 6, December 1991, pp. 1166-1187)

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Bibliographic Information

Provider: Federal Reserve Bank of Minneapolis

Part of Series: Staff Report

Publication Date: 1991

Number: 135