 Observing ShocksPedro Duarte and Kevin Hoover () History of Political Economy, 2012, vol. 44, issue 5, 226-249 Abstract: Macroeconomists have observed business cycle fluctuations over time by constructing and manipulating models in which shocks have increasingly played a greater role. Shock is a term of art that pervades modern economics appearing in nearly one-quarter of all journal articles in economics and in nearly half in macroeconomics. Surprisingly, its rise as an essential element in the vocabulary of economists can be dated only to the early 1970s. We trace the history of shocks in macroeconomics from Ragnar Frisch and Eugen Slutsky in the 1920s and 1930s through real business cycle and DSGE models and to the use of shocks as generators of impulse-response functions, which are in turn used as data in matching estimators. The history is organized around the observability of shocks. As well as documenting a critical conceptual development in economics, the history of shocks shows that James Bogen and James Woodward’s distinction between data and phenomena must be substantially relativized if it is to be at all plausible. Keywords: observation; observing; shocks; macroeconomics; New Classical Macroeconomics; Ragnar Frisch; Trygve Haavelmo; Thomas Sargent; Robert Lucas; Finn Kydland; Edward Prescott; Christopher Sims (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hop:hopeec:v:44:y:2012:i:5:p:226-249 Access Statistics for this article History of Political Economy is currently edited by Kevin D. Hoover More articles in History of Political Economy from Duke University Press Duke University Press 905 W. Main Street, Suite 18B Durham, NC 27701. |
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