News about Aggregate Demand and the Business Cycle

Jang-Ting Guo, Anca-Ioana Sirbu and Mark Weder
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Anca-Ioana Sirbu: Department of Economics, University of California-Riverside

No 2012-01, School of Economics and Public Policy Working Papers from University of Adelaide, School of Economics and Public Policy

Abstract: We show that a one-sector real business cycle model with variable capital utilization and mild increasing returns-to-scale is able to generate qualitatively as well as quantitatively realistic aggregate fluctuations driven by news shocks to future consumption demand. In sharp contrast to many studies in the existing expectations-driven business cycle literature, our results do not rely on non-separable preferences or investment adjustment costs.

Keywords: News Shocks; Aggregate Demand; Business Cycles (search for similar items in EconPapers)
JEL-codes: E32 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2012-01
New Economics Papers: this item is included in nep-bec, nep-dge and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: News about aggregate demand and the business cycle (2015)
Working Paper: News about Aggregate Demand and the Business Cycle (2014)
Working Paper: News about Aggregate Demand and the Business Cycle (2014)
Working Paper: News about Aggregate Demand and the Business Cycle (2012)
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