NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

On "Real" and "Sticky-Price" Theories of the Business Cycle

Bennett T. McCallum

NBER Working Paper No. 1933 (Also Reprint No. r0819)*
Issued in February 1987
NBER Program(s):   EFG

This paper begirE by identifying the distinguishing characteristic of the

"real business cycle" (RBC) class of macroeconomic models. It then

scruitinizes existing evidence, presented in support of the RBC approach, of

three types: calibrated general equilibrium models with no monetary sector,

vector-autoregression variance decomposition results, and univariate

measurements of trend and cyclical components. It is argued that, in fact,

these types of evidence have so far provided little support for the RBC

hypothesis. Finally, with regard to an important alternative hypothesis

concerning macroeconomic fluctuations, the paper proposes a partial

rationalization for the stickiness of nominal product prices.

*Published: McCallum, Bennett T. "On "Real" and "Sticky-Price" Theories of the Business Cycle," Journal of Money, Credit, and Banking, Vol. 18, No. 4, November 19 86, pp. 397-414.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Information about Free Papers

You should expect a free download if you are a subscriber, a corporate associate of the NBER, a journalist, a site with your domain name in ".GOV", or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

Machine-readable bibliographic record - MARC, RIS, BibTeX

 
Publications
Activities
Meetings
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org