dc.contributor.author |
Beaudry, Paul |
dc.contributor.author |
Galizia, Dana |
dc.contributor.author |
Portier, Franck |
dc.date.accessioned |
2018-04-26T10:23:17Z |
dc.date.available |
2018-04-26T10:23:17Z |
dc.date.issued |
2018-03 |
dc.identifier.uri |
http://hdl.handle.net/10230/34488 |
dc.description.abstract |
Are business cycles mainly a response to persistent exogenous shocks, or do they
instead reflect a strong endogenous mechanism which produces recurrent boom-bust
phenomena? In this paper we present new evidence in favour of the second interpretation
and, most importantly, we highlight the set of key elements that influence our answer to
this question. In particular, when adopting our most preferred estimation framework, we
find support for the somewhat extreme notion that business cycles may be generated by
stochastic limit cycle forces; that is, we find support for the notion that business cycles
may primarily reflect an endogenous propagation mechanism buffeted only by temporary
shocks. The three elements that tend to favour this type of interpretation of business
cycles are: (i) slightly extending the frequency window one associates with business cycle
phenomena, (ii) allowing for strategic complementarities across agents that arise due to
financial frictions, and (iii) allowing for a locally unstable steady state in estimation. We
document the sensitivity of our findings to each of these elements within the context of an
extended New Keynesian model with real-financial linkages. |
dc.description.sponsorship |
The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396. |
dc.format.mimetype |
application/pdf |
dc.language.iso |
eng |
dc.relation.ispartofseries |
ADEMU Working Paper Series;92 |
dc.rights |
This is an Open Access article distributed under the terms of the Creative Commons Attribution License Creative Commons Attribution 4.0 International, which permits unrestricted use, distribution and reproduction in any medium provided that the original work is properlyattributed. |
dc.rights.uri |
https://creativecommons.org/licenses/by/4.0/ |
dc.title |
Putting the cycle back into business cycle analysis |
dc.type |
info:eu-repo/semantics/workingPaper |
dc.subject.keyword |
Business cycle |
dc.subject.keyword |
Limit cycle |
dc.relation.projectID |
info:eu-repo/grantAgreement/EC/H2020/649396 |
dc.rights.accessRights |
info:eu-repo/semantics/openAccess |