NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Building Blocks of Market Clearing Business Cycle Models

Kevin M. Murphy, Andrei Shleifer, Robert W. Vishny

NBER Working Paper No. 3004
Issued in June 1989
NBER Program(s):   EFG

We compare "real business cycle" and increasing returns models of economic fluctuations. In these models, business cycles are driven by productivity changes resulting either from technology shocks or from crucial building blocks that give both types of models hope of fitting the data. These building blocks include durability of goods, specialized labor, imperfect credit and elastic labor supply. We also present new evidence on co-movement of both outputs sand labor inputs across sectors and on the increasing returns model is easier to reconcile with the data than the real business cycle model.

download in pdf format
   (521 K)

email paper

This paper is available as PDF (521 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w3004

Published:

Users who downloaded this paper also downloaded these:
Murphy, Shleifer, and Vishny Building Blocks of Market Clearing Business Cycle Models
 
Publications
Activities
Meetings
Data
People
About

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

Contact Us