Chapter 14 in handbook of macroeconomics, 1999, vol. This chapter exposits the basic rbc model and shows that it requires large technology shocks to produce. Written for the handbook of macroeconomics edited by michael woodford and john taylor. We systematically evaluate how to translate a calvo wage duration into an implied rotemberg wage adjustment cost parameter in mediumscale new keynesian dsge models by making use of the wellknown equivalence of the two setups at first order.
In this paper we study the transmission of capital depreciation shocks. Yet, there is increasing skepticism that technology shocks are a major source of business fluctuations. Gregory mankiw t he debate over the source and propagation of economic fluctuations rages as fiercely today as it did 50 years ago in the aftermath of keyness the general theory and in the midst of the great depression. University of california, san diego spring 2014 department of. No 7534, nber working papers from national bureau of economic research, inc abstract. Real business cycle models the course will cover real business cycle rbc modeling, with a focus on intuition and basic derivations. The central role of large and persistent productivity shocks in the basic model is discussed in. The real business cycle rbc research program has grown specularly over the last decade, as its concepts and methods have diffused into mainstream macroeconomics. Recent research in macroeconomics, following the contributions of ben. Business cycles, asset prices, and the frictions of capital. Resuscitating real business cycles kellogg school of management. Robert king and sergio rebelo chapter 14 in handbook of macroeconomics, 1999, vol.
The rbc theory of business cycles has two principles. Groth, lecture notes on macroeconomics, a text in the pipeline. Long and plosser 1983 coined the term real business cycles and used it to describe cycles generated by random changes in technology. Resuscitating real business cycles 931 there has been a substantial amomlt of research on real business cycles, but we organize our discussion around three main points in the next three sections. Macroeconomics information sheet for the phd assessment test suggested readings to the topics covered by the test are as follows. Resuscitating real business cycles, in handbook of macroeconomics. Constraint 7 implies that the sum of time spent to work and leisure cannot exceed.
Handbook of macroeconomics vol 1, part a, pages 3737 1999. Handbook of macroecononiics, volume 1, edited by j. Pdf simulating the real business cycle models is a popular topic in firstyear graduate courses on macroeconomics. The real business cycle rbc research program has grown spectacularly over the last decade, as its. Taylor and michael woodford eds, handbook of macroeconomics, volume 1b, pp.
This implementation was written by johannes pfeifer. Examples for further typical questions to macroeconomics. The real business cycle theory has been evolved out of the american new classical school of 1980s. Pdf simulating a simple real business cycle model using excel. Rebelo, 2000, resuscitating real business cycles, in handbook of. Find materials for this course in the pages linked along the left.
Mirman 1972 optimal economic growth and uncertainty. Handbook of macroeconomics vol 1, part a, pages 3737. It is the outcome of research mainly by kydland and prescott, barro and king, long and plosser, and prescott. Macroeconomics 1880 1900 1920 1940 1960 1980 2000 matthiasdoepke universityofchicago andreaslehnert boardofgovernorsofthe federalreservesystem andreww. Finishing up our notes on the international real business cycle audio goes well with walshs notes. Resuscitating real business cycles, handbook of macroeconomics, chapter 14. Yet, there is increasing skepticism that technology shocks are a major. Rebelo 1999, \ resuscitating real business cycles in. Purchase handbook of macroeconomics, volume 1b 1st edition. Macroeconomic fluctuations and the allocation of time. Chapter 14 resuscitating real business cycles sciencedirect. The real business cycle rbc research program has grown spectacularly over the last decade, as its concepts and methods have diffused into mainstream macroeconomics.
King and rebelo 1999 resuscitating real business cycles, ch. Economic fluctuations and growth the real business cycle rbc research program has grown spectacularly over the last decade, as its concepts and methods have diffused into mainstream macroeconomics. Resuscitating real business cycles, handbook of macroeconomics, in. Macroeconomics information sheet for the phd assessment test. Handbook of macroeconomics vol 1, part b, pages 7411228. Handbook of macroeconomics vol 2, pages 12693 2016. Resuscitating real business cycles, handbook of macroeconomics, volume 1 and romer 2012, advanced macroeconomics, 4th edition the driving processes are estimated as ar1processes on linearly detrended data. Frontiers of real business cycles, 1995, chapter 5. The basic neoclassical model, journal of monetary economics 21 23. Economic growth and business cycles, in cooley, ed. The real business cycle rbc research program has grown spectacularly over the. Rebelo born october 29, 1959 is a portuguese economist who is the current mufg bank distinguished professor of international finance, where served as chair of the finance department at the kellogg school of management. Comments on problem set 2, problem 1, linearize with r, the real rate of return. The basic neoclassical model, journal of monetary economics, 21, 195232.
The existing literature in the real business cycle tradition has concluded that these shocks are irrelevant to business cycle fluctuations. Yet, there is increasing skepticism that technology shocks. Kydland business cycles and aggregate labor market fluctuations. Aug 17, 2017 real business cycles are recurrent fluctuations in an economys incomes, products, and factor inputs especially labour that are due to nonmonetary sources. We show that they are potentially important drivers of aggregate fluctuations in a new keynesian model. Simulating a simple real business cycle model using excel. Later, plosser, summers, mankiw and many other economists gave their views of. Advanced macroeconomics, chapter 4 kydland, finn e. Resuscitating real business cycles, handbook of macroeconomics, volume 1 and romer 2012, advanced macroeconomics, 4th edition.
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