Business Cycle Anatomy

Fabrice Collard, Harris Dellas () and George-Marios Angeletos

No 20-1065, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We propose a new strategy for dissecting the macroeconomic time series, provide a template for the propagation mechanism that best describes the observed business cycles, and use its properties to appraise models of both the parsimonious and the medium-scale variety. Our findings support the existence of a main business-cycle driver but rule out the following candidates for this role: technology or other shocks that map to TFP movements; news about future productivity; and inflationary demand shocks of the textbook type. Prominent members of the DSGE literature also lack the propagation mechanism seen in our anatomy of the data. Models that aim at accommodating demanddriven cycles under flexible prices appear promising.

Date: 2020-01
New Economics Papers: this item is included in nep-dge, nep-ets and nep-mac
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Citations: View citations in EconPapers (60)

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Related works:
Journal Article: Business-Cycle Anatomy (2020)
Working Paper: Business-Cycle Anatomy (2020)
Working Paper: Business Cycle Anatomy (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:123954

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