Business-Cycle Anatomy
We propose a new strategy for dissecting the macroeconomic time series, provide a template for the business- cycle propagation mechanism that best describes the data, and use its properties to appraise models of both the parsimonious and the medium- scale variety. Our findings support the existence...
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| Format: | Article |
| Language: | English |
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American Economic Association
2021
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| Online Access: | https://hdl.handle.net/1721.1/130273 |
| Summary: | We propose a new strategy for dissecting the macroeconomic time series, provide a template for the business- cycle propagation mechanism that best describes the data, and use its properties to appraise models of both the parsimonious and the medium- scale variety. Our findings support the existence of a main business- cycle driver but rule out the following candidates for this role: Technology or other shocks that map to TFP movements; news about future productivity; and inflationary demand shocks of the textbook type. Models aimed at accommodating demand- driven cycles without a strict reliance on nominal rigidity appear promising. |
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