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The Dynamic Effects of Aggregate Demand and Supply Disturbances

Olivier Blanchard () and Danny Quah ()

American Economic Review, 1989, vol. 79, issue 4, 655-73

Abstract: The authors interpret fluctuations in GNP and unemployment as due to two types of disturbances: disturbances that have a permanent effect on output and disturbances that do not. They interpret the first as supply disturbances, the second as demand disturbances. Demand disturbances have a hump-shaped, mirror-image effect on output and unemployment. The effect of supply disturbances on output increases steadily over time, peaking after two years and reaching a plateau after five years. Copyright 1989 by American Economic Association.

Date: 1989
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Working Paper: The Dynamic Effects of Aggregate Demand and Supply Disturbance (1988)
Working Paper: The Dynamic Effects of Aggregate Demand and Supply Disturbances (1988) Downloads
Software Item: BQDODRAWS: RATS procedure to implement Monte Carlo draws from a VAR with Blanchard-Quah factorization Downloads
Software Item: RATS programs to replicate Blanchard and Quah AER 1989 Downloads
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