Technology Shocks and Aggregate Fluctuations: How Well Does the Real Business Cycle Model Fit Postwar U.S. Data?

2004 ◽  
Author(s):  
Jordi Gali ◽  
Pau Rabanal
2002 ◽  
Vol 92 (1) ◽  
pp. 181-197 ◽  
Author(s):  
Marcelo L Veracierto

This paper evaluates the importance of microeconomic irreversibilities for aggregate dynamics using a real-business-cycle (RBC) model characterized by investment irreversibilities at the establishment level. The main finding is that investment irreversibilities do not play a significant role in an otherwise standard real-business-cycle model: Even though investment irreversibilities are crucial for establishment-level dynamics, aggregate fluctuations are basically the same under fully flexible or completely irreversible investment.


1998 ◽  
Vol 42 (1) ◽  
pp. 108-111
Author(s):  
James E. Hartley

This paper tests whether a real business cycle model can be built using a specific technological shock, a change in the depreciation rate, instead of an aggregate multiplicative shock. The model cannot duplicate standard business cycle facts.


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