Download or read book Hysteresis and Business Cycles written by Ms.Valerie Cerra and published by International Monetary Fund. This book was released on 2020-05-29 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Traditionally, economic growth and business cycles have been treated independently. However, the dependence of GDP levels on its history of shocks, what economists refer to as “hysteresis,” argues for unifying the analysis of growth and cycles. In this paper, we review the recent empirical and theoretical literature that motivate this paradigm shift. The renewed interest in hysteresis has been sparked by the persistence of the Global Financial Crisis and fears of a slow recovery from the Covid-19 crisis. The findings of the recent literature have far-reaching conceptual and policy implications. In recessions, monetary and fiscal policies need to be more active to avoid the permanent scars of a downturn. And in good times, running a high-pressure economy could have permanent positive effects.
Download or read book An Endogenous Mechanism of Business Cycles written by Dimitri Kroujiline and published by . This book was released on 2019 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper suggests that business cycles may be a manifestation of coupled real economy and stock market dynamics and describes a mechanism that can generate economic fluctuations consistent with observed business cycles. To this end, we seek to incorporate into the macroeconomic framework a dynamic stock market model based on opinion interactions (Gusev et al., 2015). We derive this model from microfoundations, provide its empirical verification, demonstrate that it contains the efficient market as a particular regime and establish a link through which macroeconomic models can be attached for the study of real economy and stock market interaction. To examine key effects, we link it with a simple macroeconomic model (Blanchard, 1981). The coupled system generates nontrivial endogenous dynamics, which exhibit deterministic and stochastic features, producing quasiperiodic fluctuations (business cycles). We also inspect this system's behavior in the phase space. The real economy and the stock market coevolve dynamically along the path governed by a stochastically-forced dynamical system with two stable equilibria, one where the economy expands and the other where it contracts, resulting in business cycles identified as the coherence resonance phenomenon. Thus, the incorporation of stock market dynamics into the macroeconomic framework, as presented here, allows the derivation of realistic behaviors in a tractable setting.
Download or read book Business Cycles written by Victor Zarnowitz and published by University of Chicago Press. This book was released on 2007-11-01 with total page 613 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume presents the most complete collection available of the work of Victor Zarnowitz, a leader in the study of business cycles, growth, inflation, and forecasting.. With characteristic insight, Zarnowitz examines theories of the business cycle, including Keynesian and monetary theories and more recent rational expectation and real business cycle theories. He also measures trends and cycles in economic activity; evaluates the performance of leading indicators and their composite measures; surveys forecasting tools and performance of business and academic economists; discusses historical changes in the nature and sources of business cycles; and analyzes how successfully forecasting firms and economists predict such key economic variables as interest rates and inflation.
Download or read book The American Business Cycle written by Robert J. Gordon and published by University of Chicago Press. This book was released on 2007-11-01 with total page 882 pages. Available in PDF, EPUB and Kindle. Book excerpt: In recent decades the American economy has experienced the worst peace-time inflation in its history and the highest unemployment rate since the Great Depression. These circumstances have prompted renewed interest in the concept of business cycles, which Joseph Schumpeter suggested are "like the beat of the heart, of the essence of the organism that displays them." In The American Business Cycle, some of the most prominent macroeconomics in the United States focuses on the questions, To what extent are business cycles propelled by external shocks? How have post-1946 cycles differed from earlier cycles? And, what are the major factors that contribute to business cycles? They extend their investigation in some areas as far back as 1875 to afford a deeper understanding of both economic history and the most recent economic fluctuations. Seven papers address specific aspects of economic activity: consumption, investment, inventory change, fiscal policy, monetary behavior, open economy, and the labor market. Five papers focus on aggregate economic activity. In a number of cases, the papers present findings that challenge widely accepted models and assumptions. In addition to its substantive findings, The American Business Cycle includes an appendix containing both the first published history of the NBER business-cycle dating chronology and many previously unpublished historical data series.
Download or read book Endogenous Cycles in a Stiglitz Weiss Economy written by Javier Suarez and published by . This book was released on 1997 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Synchronization of Endogenous Business Cycles written by Marco Pangallo and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Business cycles tend to comove across countries. However, standard models that attribute comovement to propagation of exogenous shocks struggle to generate a level of co-movement that is as high as in the data. In this paper, we consider models that produce business cycles endogenously, through some form of non-linear dynamicsâ€"limit cycles or chaos. These models generate stronger comovement, because they combine shock propagation with synchronization of endogenous dynamics. In particular, we study a demand-driven model in which business cycles emerge from strategic complementarities within countries, synchronizing their oscillations through international trade linkages. We develop an eigen-decomposition that explores the interplay between non-linear dynamics, shock propagation and network structure, and use this theory to understand the mechanisms of synchronization. Next, we calibrate the model to data on 24 countries and show that the empirical level of comovement can only be matched by combining endogenous business cycles with exogenous shocks. Our results lend support to the hypothesis that business cycles are at least in part caused by underlying non-linear dynamics.
Download or read book Endogenous Entry Product Variety and Business Cycles written by Florin Ovidiu Bilbiie and published by . This book was released on 2007 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper builds a framework for the analysis of macroeconomic fluctuations that incorporates the endogenous determination of the number of producers over the business cycle. Economic expansions induce higher entry rates by prospective entrants subject to irreversible investment costs. The sluggish response of the number of producers (due to the sunk entry costs) generates a new and potentially important endogenous propagation mechanism for real business cycle models. The stock-market price of investment (corresponding to the creation of new productive units) determines household saving decisions, producer entry, and the allocation of labor across sectors. The model performs at least as well as the benchmark real business cycle model with respect to the implied second-moment properties of key macroeconomic aggregates. In addition, our framework jointly predicts a procyclical number of producers and procyclical profits even for preference specifications that imply countercyclical markups. When we include physical capital, the model can reproduce the variance and autocorrelation of GDP found in the data.
Download or read book Modern Business Cycle Theory written by Robert J. Barro and published by . This book was released on 1989 with total page 358 pages. Available in PDF, EPUB and Kindle. Book excerpt: The new classical approach to macroeconomics, which assumes that people gather and use economic information efficiently, has been the most important theoretical advance since the Keynesian revolution of the 1930s. This book surveys the major contributions of the "second generation" of proponents of the new classical approach, emphasizing real business cycle theories and applying them to a variety of phenomena. The chapters include expositions of growth theory, real models of business fluctuations, the informational role of prices, consumption, fiscal policy, rules versus discretion in monetary policy, time consistency and policy, and monetary models. Although the chapters are aimed at advanced undergraduate- and graduate-level students, they will also be of interest to researchers who are looking for a compact and original exposition of the new classical macroeconomics.
Download or read book The Evolution of Endogenous Business Cycles written by Roger E. A. Farmer and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper distinguishes two kinds of Endogenous Business Cycle models; EBC1 models, which display dynamic indeterminacy, and EBC2 models, which display steady-state indeterminacy. Both strands of the literature have their origins in the sunspot literature that developed at the University of Pennsylvania in the 1980s. I argue that EBC1 models are part of the evolution of modern macroeconomics that has classical roots dating back to the 1920s. EBC2 models provide a microfoundation to one of the most important ideas to emerge from Keynes' (1936) General Theory; that high involuntary unemployment can persist as part of the steady-state equilibrium of a market economy.
Download or read book Endogenous Market Structures and the Macroeconomy written by Federico Etro and published by Springer Science & Business Media. This book was released on 2009-06-17 with total page 363 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is a key year for the evolution of international markets. The global economy is experiencing the most severe downturn since the thirties, it is temporarily leaving a path of sustained growth that characterized the last decades, and is facing an impressive decline of trade between countries. Banks are going bankrupt, the stock market has crashed, rms are going out of bu- ness or drastically reducing their production and exports, workers are being red and investment in new business creation or innovation is shrinking. Meanwhile, consumers con dence has dropped at its minimum, aggregate demand has been declining for months and expansionary policies and int- national coordination have failed to counteract the crisis until now. It is quite likely that all this will change sooner or later, but at the end of this crisis our understanding of the macroeconomy may change as well. In front of these crucial events, this book is not an attempt at proposing a radically new way of interpreting macroeconomic phenomena, and, as a m- ter of fact, it is not even a book on macroeconomic theory. My more modest goal is to collect a number of insights derived from recent research on the role of competition and innovation in the analysis of three topics: business cycles, trade and growth through innovations.
Download or read book Frontiers of Business Cycle Research written by Thomas F. Cooley and published by Princeton University Press. This book was released on 1995-02-26 with total page 452 pages. Available in PDF, EPUB and Kindle. Book excerpt: This introduction to modern business cycle theory uses a neoclassical growth framework to study the economic fluctuations associated with the business cycle. Presenting advances in dynamic economic theory and computational methods, it applies concepts to t
Download or read book Technology Shocks and Aggregate Fluctuations written by Mr.Pau Rabanal and published by International Monetary Fund. This book was released on 2004-12-01 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: Our answer: Not so well. We reached that conclusion after reviewing recent research on the role of technology as a source of economic fluctuations. The bulk of the evidence suggests a limited role for aggregate technology shocks, pointing instead to demand factors as the main force behind the strong positive comovement between output and labor input measures.
Download or read book Endogenous Entry Product Variety and Business Cycles written by Florin Bilbiie and published by . This book was released on 2013 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper builds a framework for the analysis of macroeconomic fluctuations that incorporates the endogenous determination of the number of producers over the business cycle. Economic expansions induce higher entry rates by prospective entrants subject to irreversible investment costs. The sluggish response of the number of producers (due to the sunk entry costs) generates a new and potentially important endogenous propagation mechanism for real business cycle models. The stock-market price of investment (corresponding to the creation of new productive units) determines household saving decisions, producer entry, and the allocation of labor across sectors. The model performs at least as well as the benchmark real business cycle model with respect to the implied second-moment properties of key macroeconomic aggregates. In addition, our framework jointly predicts a procyclical number of producers and procyclical profits even for preference specifications that imply countercyclical markups. When we include physical capital, the model can reproduce the variance and autocorrelation of GDP found in the data.
Download or read book The Economic Cycle and the Growth of the Chinese Economy written by Li Jianwei and published by Taylor & Francis. This book was released on 2017-03-16 with total page 325 pages. Available in PDF, EPUB and Kindle. Book excerpt: The nature of the economic cycle has been a long-standing problem for economists. Key questions include: What are the causes of the economic cycle? Are the causes endogenous or exogenous? and Why is the economic cycle irregular? This book explores the theory of the economic cycle in relation to economic growth in China. The book concludes that the cause of the economic cycle is endogenous, that the periodic fluctuation of economic growth and its dynamic equilibrium are natural aspects of the growth of the economy, and it puts forward a new model of the economic cycle which confidently predicts the future trajectory of China’s economic growth.
Download or read book Growth and Business Cycles with Equilibrium Indeterminacy written by Kazuo Mino and published by . This book was released on 2017 with total page 230 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Economic Growth and Business Cycles written by Paolo Sylos Labini and published by Edward Elgar Publishing. This book was released on 1993 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this study, Professor Sylos Labini offers an analysis of growth that is at once theoretical, historical and statistical. The central aim of neo-classical economics has been to discover the equilibrium values of prices, incomes, employment and production. This text by contrast, seeks to understand the logic behind the movement of these quantities over time.
Download or read book Endogenous Business Cycles and the Dynamics of Output Hours and Consumption written by Stephanie Schmitt-Grohé and published by . This book was released on 1999 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt:
