Granger Causality and Equilibrium Business Cycle Theory

Yi Wen

Working Papers from Cornell University, Center for Analytic Economics

Abstract: Post war US data show that consumption growth causes output and investment growth. This is puzzling if technology is the driving force of the business cycle. I ask whether general equilibrium models driven by demand shocks can rationalize the observed causal relations. My conclusion is that business cycle theory remains behind business cycle measurement.

JEL-codes: E13 E32 (search for similar items in EconPapers)
Date: 2001
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https://cae.economics.cornell.edu/granger1.pdf

Related works:
Journal Article: Granger causality and equilibrium business cycle theory (2007)
Working Paper: Granger causality and equilibrium business cycle theory (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:corcae:01-07

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