An American Macroeconomic Picture: Supply and Demand Shocks in the Frequency Domain

Mario Forni, Luca Gambetti, Antonio Granese, Luca Sala and Stefano Soccorsi

American Economic Journal: Macroeconomics, 2025, vol. 17, issue 3, 311-41

Abstract: We provide a few new empirical facts that theoretical models should feature in order to be consistent with the data. (i) There are two classes of shocks: demand and supply. Supply shocks have long-run effects on economic activity; demand shocks do not. (ii) Both supply and demand shocks are important sources of business cycles' fluctuations. (iii) Supply shocks are the primary driver for consumption fluctuations, demand shocks for investment. (iv) The demand shock is closely related to the credit spread, while the supply shock is essentially a news shock. The results are obtained using a novel frequency domain method.

JEL-codes: C32 E32 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/mac.20230295 (application/pdf)
https://doi.org/10.3886/E207982V1 (text/html)
https://www.aeaweb.org/articles/materials/23448 (application/pdf)
https://www.aeaweb.org/articles/materials/23449 (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: An American Macroeconomic Picture: Supply and Demand Shocks in the Frequency Domain (2024)
Working Paper: An American Macroeconomic Picture. Supply and Demand Shocks in the Frequency Domain (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aejmac:v:17:y:2025:i:3:p:311-41

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/mac.20230295

Access Statistics for this article

American Economic Journal: Macroeconomics is currently edited by Simon Gilchrist

More articles in American Economic Journal: Macroeconomics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().