Deconstructing the Success of Real Business Cycles.

The empirical success of Real Business Cycle (RBC) models is often judged by their ability to explain the behavior of a multitude of real macroeconomic variables using a single exogenous shock process. This paper shows that in a model with the same basic structure as the bare bones RBC model, moneta...

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Publicado en:Economic Inquiry Vol. 47; no. 4; pp. 739 - 754
Autor principal: Nakamura, Emi
Formato: Artículo
Publicado: Wiley-Blackwell October 2009
Acceso en línea:Ver este registro en EBSCOhost
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      ab: The empirical success of Real Business Cycle (RBC) models is often judged by their ability to explain the behavior of a multitude of real macroeconomic variables using a single exogenous shock process. This paper shows that in a model with the same basic structure as the bare bones RBC model, monetary, cost-push or preference shocks are equally successful at explaining the behavior of macroeconomic variables. Thus, the empirical success of the RBC model with respect to standard RBC evaluation techniques arises from the basic form of the dynamic stochastic general equilibrium model, not from the specific role of the productivity shock. (JEL E32, E37) Reprinted by permission of the publisher.
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