Keynesian impulses versus solow residuals: Identifying sources of business cycle fluctuations

David N. DeJong, Beth F. Ingram, Charles H. Whiteman

Research output: Contribution to journalArticle

27 Scopus citations

Abstract

We employ a neoclassical business-cycle model to study two sources of business-cycle fluctuations: marginal efficiency of investment shocks, and total factor productivity shocks. The parameters of the model are estimated using a Bayesian procedure that accommodates prior uncertainty about their magnitudes; from these estimates, posterior distributions of the two shocks are obtained. The postwar US experience suggests that both shocks are important in understanding fluctuations, but that total factor productivity shocks are primarily responsible for beginning and ending recessions.

Original languageEnglish (US)
Pages (from-to)311-329
Number of pages19
JournalJournal of Applied Econometrics
Volume15
Issue number3
DOIs
StatePublished - Jan 1 2000

All Science Journal Classification (ASJC) codes

  • Social Sciences (miscellaneous)
  • Economics and Econometrics

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