• AEA in the news
  • November 10, 2016

Econ 101 Might Be Wrong About Supply and Demand

Stock price ticker at the Amsterdam Stock Exchange, Amsterdam, the Netherlands, March 16, 2015.


A Bloomberg View column about rethinking the business cycle cited a 2006 article from the American Economic Review that may have been ahead of its time. In Stock Prices, News, and Economic Fluctuations, authors Paul Beaudry and Franck Portier lay out a model where news about future technological growth (or stagnation) is revealed in present-day stock prices, leading to booms and busts that precede the actual change in technology.