Real Business Cycle Theory

Brian P. Simpson

Chapter 3 in Money, Banking, and the Business Cycle, 2014, pp 79-110 from Palgrave Macmillan

Abstract: Abstract Real business cycle (RBC) theories are nonmonetary explanations of the business cycle. Supporters of RBC theory claim that business cycles arise due to changes in real factors, instead of monetary factors, in the economy. The focus is on alleged causes of the business cycle that emanate from places other than changes in the supply of money and spending. Further, such cycle theory assumes markets are always in equilibrium (i.e., they always clear, even during recessions and depressions).1

Keywords: Interest Rate; Business Cycle; Central Bank; Money Supply; Expansion Phase (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-33656-9_4

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DOI: 10.1057/9781137336569_4

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