Creator

• McGrattan, Ellen R.

Series

• Quarterly review (Federal Reserve Bank of Minneapolis. Research Department)

Issue number

• Vol. 18, No. 4

Date created

• 1994 Fall

Abstract

• This article reports the recent progress made by researchers trying to build business cycle models that can reliably reproduce aggregate U.S. time series. The article first describes some features of the U.S. data that the models are meant to reproduce. Then it describes a version of the standard business cycle model, along with the indivisible labor extension of that model, both of which assume that fluctuations in economic activity are caused only by shocks to technology. Finally, it describes a version of recent other extensions which assume that shocks to fiscal variables also contribute to the fluctuations. Adding fiscal shocks to standard business cycle models is shown to significantly improve their ability to mimic some of the data.

Related information

• Related data: Additional files and M-files and ftools.

Corporate Author

• Federal Reserve Bank of Minneapolis. Research Department

Publisher

• Federal Reserve Bank of Minneapolis

Resource type

• Article

DOI

•  https://doi.org/10.21034/qr.1841

In Collection:

• Quarterly Review

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	Another Attempt to Quantify the Benefits of Reducing Inflation	12/11/2019	Public