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What can we learn about news shocks from the late 1990s and early 2000s boom-bust period?

Nadav Ben Zeev ()

Journal of Economic Dynamics and Control, 2018, vol. 87, issue C, 94-105

Abstract: The major boom-bust period of 1997–2003 is commonly viewed as an expectations-driven episode in which overly optimistic expectations about information and communications technology were followed by their downward revision. This paper employs a novel approach to identifying the news shocks of this period that restricts the identified shock to have its maximal three-year moving average of realizations in the 1997–1999 boom period, followed by a negative average in the bust period. I provide robust evidence that this shock raises output, hours, investment, and consumption, and accounts for the majority of their business cycle variation.

Keywords: Business cycles; Investment-specific technology; News shocks; Boom-bust period (search for similar items in EconPapers)
JEL-codes: E32 (search for similar items in EconPapers)
Date: 2018
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Working Paper: WHAT CAN WE LEARN ABOUT NEWS SHOCKS FROM THE LATE 1990s AND EARLY 2000s BOOM-BUST PERIOD? (2015) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:87:y:2018:i:c:p:94-105

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