AbstractWe 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.
CitationAngeletos, George-Marios, Fabrice Collard, and Harris Dellas. 2020. "Business-Cycle Anatomy." American Economic Review, 110 (10): 3030-70. DOI: 10.1257/aer.20181174
- C22 Single Equation Models; Single Variables: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
- E10 General Aggregative Models: General
- E32 Business Fluctuations; Cycles