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News-Driven Business Cycles: Insights and Challenges

Paul Beaudry () and Franck Portier ()

Journal of Economic Literature, 2014, vol. 52, issue 4, 993-1074

Abstract: There is a widespread belief that changes in expectations may be an important independent driver of economic fluctuations. The news view of business cycles offers a formalization of this perspective. In this paper we discuss mechanisms by which changes in agents' information, due to the arrival of news, can cause business cycle fluctuations driven by expectational change, and we review the empirical evidence aimed at evaluating their relevance. In particular, we highlight how the literature on news and business cycles offers a coherent way of thinking about aggregate fluctuations, while at the same time we emphasize the many challenges that must be addressed before a proper assessment of the role of news in business cycles can be established. (JEL D83, D84, E13, E32, O33)

JEL-codes: D83 D84 E13 E32 O33 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/jel.52.4.993
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Related works:
Working Paper: News Driven Business Cycles: Insights and Challenges (2014) Downloads
Working Paper: News Driven Business Cycles: Insights and Challenges (2013) Downloads
Working Paper: News Driven Business Cycles: Insights and Challenges (2013) Downloads
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