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The Evolution of Endogenous Business Cycles

Roger Farmer ()

No 18284, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper distinguishes two kinds of Endogenous Business Cycle models; EBC1 models, which display dynamic indeterminacy, and EBC2 models, which display steady-state indeterminacy. Both strands of the literature have their origins in the sunspot literature that developed at the University of Pennsylvania in the 1980s. I argue that EBC1 models are part of the evolution of modern macroeconomics that has classical roots dating back to the 1920s. EBC2 models provide a microfoundation to one of the most important ideas to emerge from Keynes' (1936) General Theory; that high involuntary unemployment can persist as part of the steady-state equilibrium of a market economy.

JEL-codes: B22 E0 E3 (search for similar items in EconPapers)
Date: 2012-08
New Economics Papers: this item is included in nep-dge, nep-hpe and nep-mac
Note: EFG
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Published as Farmer, Roger E.A., 2016. "The Evolution Of Endogenous Business Cycles," Macroeconomic Dynamics, Cambridge University Press, vol. 20(02), pages 544-557, March.

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Related works:
Journal Article: THE EVOLUTION OF ENDOGENOUS BUSINESS CYCLES (2016) Downloads
Working Paper: The Evolution of Endogenous Business Cycles (2012) Downloads
Working Paper: The Evolution of Endogenous Business Cycles (2012) Downloads
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