Hostname: page-component-cd9895bd7-q99xh Total loading time: 0 Render date: 2024-12-27T22:55:44.872Z Has data issue: false hasContentIssue false
  • English
  • Français

REAL BUSINESS CYCLES AFTER THREE DECADES

A Panel Discussion with Edward Prescott, Finn Kydland, Charles Plosser, John Long, Thomas Cooley, and Gary Hansen

Published online by Cambridge University Press:  17 December 2013

Sumru Altug  and
Warren Young
Sumru Altug*
Affiliation:
Koç University
Warren Young
Affiliation:
Bar Ilan University
*
Address correspondence to: Sumru Altug, Department of Economics, Koç University, Rumelifeneri Yolu, Sarı yer 34450, Istanbul, Turkey; e-mail: saltug@ku.edu.tr.
Get access Rights & Permissions [Opens in a new window]

Abstract

The transcript of a panel discussion marking three decades of the real business cycle approach to macroeconomic analysis as manifested in Kydland and Prescott's “Time to Build” (Econometrica, 1982) and Long and Plosser's “Real Business Cycles” (Journal of Political Economy, 1983). The panel consists of Edward Prescott, Finn Kydland, Charles Plosser, John Long, Thomas Cooley, and Gary Hansen. The discussion is moderated by Sumru Altug and Warren Young. The panel touches on a wide variety of issues related to real business cycle models, including their history and methodology, starting with the work of Prescott and Kydland at Carnegie Tech and Plosser and Long at Rochester; their applications to policy; and their role in the recent financial crisis and likely future.

The panel discussion was held in a session sponsored by the History of Economics Society at the Allied Social Sciences Association (ASSA) meetings in the Randle A Room of the Manchester Grand Hyatt Hotel in San Diego, California.

Keywords

Real Business CyclesAggregate Dynamic EconomicsQuantitative MethodsHistory and Methodology of RBC ModelsKydland–Prescott ContributionsLong–Plosser Contributions
Type
MD Dialogue
Information
Macroeconomic Dynamics , Volume 19 , Issue 2 , March 2015 , pp. 425 - 445
Copyright
Copyright © Cambridge University Press 2013 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Altug, S. (1985) Two Essays in the Equilibrium Approach to Aggregate Fluctuations and Asset Pricing. Ph.D. Thesis, Graduate School of Industrial Administration, Carnegie–Mellon University.Google Scholar
Altug, S. (1989) Time-to-build and aggregate fluctuations: Some new evidence. International Economic Review 30, 889–920.Google Scholar
Backus, D., Kehoe, P., and Kydland, F. (1992) International real business cycles. Journal of Political Economy 100, 745–775.CrossRefGoogle Scholar
Bénassy, J.-P. (2007) IS-LM and the multiplier: A dynamic general equilibrium model. Economics Letters 96, 189–195.Google Scholar
Beveridge, S. and Nelson, C. (1981) A new approach to decomposition of economic time series into permanent and transitory components with particular attention to measurement of the “business cycle.” Journal of Monetary Economics 7, 151–174.Google Scholar
Brock, W. (1979) An integration of stochastic growth theory and the theory of finance: Part 1. The growth model. In Green, J. and Scheinkman, J. (eds.), General Equilibrium, Growth, and Trade: Essays in Honor of Lionel McKenzie, pp. 165–192. New York: Academic Press.Google Scholar
Brock, W. (1982) Asset prices in a production economy. In McCall, J. (ed.), The Economics of Information and Uncertainty, pp. 1–46. National Bureau of Economic Research. Chicago: University of Chicago Press.Google Scholar
Burns, A. and Mitchell, W. (1946) Measuring Business Cycles. National Bureau of Economic Research, Chicago: University of Chicago Press.Google Scholar
Chari, V., Kehoe, P., and McGratten, E. (2000) Sticky price models of the business cycle: Can the contract multiplier solve the persistence problem. Econometrica 68, 1151–1179.Google Scholar
Cho, J. and Cooley, T. (1994) Employment and hours over the business cycle. Journal of Economic Dynamics and Control 18, 411–432.Google Scholar
Cole, H. and Ohanian, L. (1999) The Great Depression in the United States from a neoclassical perspective. Federal Reserve Bank of Minneapolis Quarterly Review 23, 2–24.Google Scholar
Cooley, T. and Hansen, G. (1995) Money and the business cycle. In Cooley, T. (ed.), Frontiers of Business Cycle Research, pp. 175–216. Princeton, NJ: Princeton University Press.Google Scholar
Cox, J., Ingersoll, J., and Ross, S. (1985a) An intertemporal general equilibrium model of asset prices. Econometrica 53, 363–384.Google Scholar
Cox, J, Ingersoll, J., and Ross, S. (1985b) A theory of the term structure of interest rates. Econometrica 53, 385–408.Google Scholar
Hansen, G. (1985) Indivisible labor and the business cycle. Journal of Monetary Economics 16, 309–327.Google Scholar
Kydland, F. and Prescott, E. (1977) Rules rather than discretion: the inconsistency of optimal plans. Journal of Political Economy 85, 473–492.Google Scholar
Kydland, F. and Prescott, E. (1982) Time-to-build and aggregate fluctuations. Econometrica 50, 1345–1370.Google Scholar
Kydland, F. and Prescott, E. (1991) Hours and employment variation in business cycle theory. Economic Theory 1, 63–81.Google Scholar
Leckachman, R. (1964) Keynes General Theory: Reports of Three Decades. New York; St. Martin's Press.Google Scholar
Ljundquist, L. and Sargent, T. (2000) Recursive Macroeconomic Theory. Cambridge, MA: MIT Press.Google Scholar
Long, J. (1971) Consumption–Investment Decisions and Equilibrium in the Securities Market. Ph.D. Dissertation, Graduate School of Industrial Administration, Carnegie Mellon University. Published 1972 in Jensen, M. (ed.), Studies in the Theory of Capital Markets, pp. 146–222. New York: Praeger Publishers.Google Scholar
Long, J. and Plosser, C. (1983) Real business cycles. Journal of Political Economy 91 (1), 39–69.CrossRefGoogle Scholar
Lucas, R. (1972) Expectations and the neutrality of money. Journal of Economic Theory 4, 103–124.Google Scholar
Lucas, R. (1977) Understanding business cycles. In Brunner, K. and Meltzer, A. (eds.), Stabilization of the Domestic and International Economy, Carnegie-Rochester Conference Series on Public Policy 5, pp. 7–29. Amsterdam: North-Holland.Google Scholar
Mehra, R. and Prescott, E. (1985) The equity premium: A puzzle. Journal of Monetary Economics 15, 145–161.Google Scholar
Miller, M. and Upton, C. (1974) Macroeconomics: A Neo-classical Introduction. Homewood, IL: Irwin.Google Scholar
Orphanides, A. and Williams, J. (2002) Robust monetary policy rules with unknown natural rates. Brookings Papers on Economic Activity 2, 63–145.Google Scholar
Plosser, C. (1976) A Time-Series Analysis of Seasonality in Econometric Models with an Application to a Monetary Model. Ph.D. Thesis, Graduate School of Business, University of Chicago.Google Scholar
Prescott, E. (1967) Adaptive Decision Rules for Macro Economic Planning. Ph.D. Thesis, Carnegie Institute of Technology.Google Scholar
Rogerson, R. (1988) Indivisible labor, lotteries, and equilibrium. Journal of Monetary Economics 21, 3–16.Google Scholar
Sargent, T. (1978) Estimation of Dynamic Labor Demand Schedules under Rational Expectations. Staff Report 27, Federal Reserve Bank of Minneapolis.CrossRefGoogle Scholar
Sargent, T. and Sims, C. (1977) Business cycle modeling without pretending to have too much a priori economic theory. In Sims, C. (ed.), New Methods in Business Cycle Research: Proceedings from a Conference, pp. 45–109. Minneapolis, MN: Federal Reserve Bank of Minneapolis.Google Scholar
Taylor, J. (ed.) (1999a) Monetary Policy Rules. Chicago: University of Chicago Press.Google Scholar
Taylor, J. (1999b) The robustness and efficiency of monetary policy rules as guidelines for interest rate setting by the European Central Bank. Journal of Monetary Economics 43, 655–679.Google Scholar