TY  - JOUR
AU  - Murphy,Kevin M.
AU  - Shleifer,Andrei
AU  - Vishny,Robert W.
TI  - Building Blocks of Market Clearing Business Cycle Models
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3004
PY  - 1989
Y2  - June 1989
UR  - http://www.nber.org/papers/w3004
L1  - http://www.nber.org/papers/w3004.pdf
N1  - Author contact info:
Kevin M. Murphy
Booth School of Business
The University of Chicago
5807 S. Woodlawn Ave.
Chicago, IL  60637
Tel: 773/702-7280
Fax: 773/834-3554
E-Mail: murphy@chicagoBooth.edu

Andrei Shleifer
Department of Economics
Harvard University
Littauer Center M-9
Cambridge, MA 02138
Tel: 617/495-5046
Fax: 617/496-1708
E-Mail: ashleifer@harvard.edu

Robert W. Vishny
Booth School of Business
The University of Chicago
5807 South Woodlawn Avenue
Chicago, IL  60637
Tel: 773/702-2522
Fax: 773/834-1920
E-Mail: Rvishny@gmail.com
M1  - published as Kevin M. Murphy, Andrei Shleifer, Robert W. Vishny. "Building Blocks of Market Clearing Business Cycle Models," in Olivier Jean Blanchard and Stanley Fischer, editors, "NBER Macroeconomics Annual 1989, Volume 4" MIT Press (1989)

AB  - 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.
ER  -