search query: @indexterm BUSINESS CYCLES / total: 529
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| Author: | Schmitt-Grohn, S. |
| Title: | Comparing four models of aggregate fluctuations due to self-fulfilling expectations |
| Journal: | Journal of Economic Theory
1997 : JAN, VOL. 72:1, p. 96-147 |
| Index terms: | BUSINESS CYCLES MODELS EXPECTATIONS |
| Language: | eng |
| Abstract: | This study compares four equilibrium business cycle models that allow for aggregate fluctuations in the absence of shocks to economic fundamentals. The models differ from standard business cycle models in way that firms have market power and/or increasing returns to scale production functions. The relative volatility, autocorrelation and contemporaneous correlation properties of macroeconomic aggregates predicted by the four endogenous business cycle models are shown to be consistent with those observed in postwar U.S. data. Also, questions about the empirical plausibility of self-fulfilling expectations as an explanation of actual business cycles was rised. |
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