TY  - JOUR
AU  - Blanchard,Olivier J.
AU  - Watson,Mark W.
TI  - Are Business Cycles All Alike?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1392
PY  - 1987
Y2  - December 1987
UR  - http://www.nber.org/papers/w1392
L1  - http://www.nber.org/papers/w1392.pdf
N1  - Author contact info:
Olivier J. Blanchard
International Monetary Fund
Economic Counsellor and Director
Research Department
700 19th Street, NW
Rm. 10-700
Washington DC, 20431
Tel: 202-623-7825
Fax: 202-623-7271
E-Mail: blanchar@mit.edu

Mark W. Watson
Department of Economics
Princeton University
Princeton, NJ 08544-1013
Tel: 609/258-4811
Fax: 609/258-5533
E-Mail: mwatson@princeton.edu
M1  - published as Olivier J. Blanchard, Mark W. Watson. "Are Business Cycles All Alike?," in Robert J. Gordon, ed., "The American Business Cycle: Continuity and Change" University of Chicago Press (1986)

AB  - This paper examines two questions. The first is whether economic fluctuations-business cycles-are due to an accumulation of nall shocks or instead mostly to infrequent large shocks. The paper concludes that neither of these two extreme views accurately characterize fluctuations. The second question is whether fluctuations are due mostly to one source of shocks, for example monetary, or instead to many sources. The paper concludes that evidence strongly supports the hypothesis of many, about equally important, sources of shocks.To analyze the empirical evidence and to reach these conclusions, the paper uses two different statistical approaches. The first is estimation ofa structural model, using a set of just identifying restrictions. The secondis non-structural and may be described as a formalization of the Burns Mitchell techniques. Both approaches are somewhat novel and should be of independent interest.
ER  -