search query: @indexterm BUSINESS CYCLES / total: 529
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| Author: | Howard, F. |
| Title: | Real business cycles in a Keynesian macro model |
| Journal: | Oxford Economic Papers
1993 : OCT, VOL. 45:4, p. 618-638 |
| Index terms: | BUSINESS CYCLES MODELS EMPLOYMENT |
| Language: | eng |
| Abstract: | Imperfectly competitive Keynesian macro models provide a simple, plausible account of real business cycles. These cycles are the result of rule-of-thumb pricing policies followed by firms, rather than a by-product of intertemporal optimization by a representative, rational consumer. Three rules are considered: a mark-up rule, a price leadership rule, and a rule based on adaptive expectations. In each case random productivity shocks lead to cyclical movements in output and employment. Simulations indicate that the losses associated with each rule are often trivially small. |
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