The determinants of UK business cycles

Article Abstract:

An extended neoclassical stochastic growth model employed to interpret UK business cycles developed estimates of productivity and preference shocks that are both highly persistent, volatile and potentially capable of determining UK business cycles. Simulations revealed that in combination with a neoclassical growth model, these shocks can match UK business cycles. The estimated productivity term is not anticipated by an extensive range of demand side variables, including fiscal and monetay policy instruments.

Administration of General Economic Programs, Business Methods, Currency Stabilization Programs, United Kingdom, Usage, Monetary policy, Business planning, Learning models (Stochastic processes), Business cycles, Currency stabilization, Stochastic models

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An alternative explanation of the price puzzle

Article Abstract:

The paper offers to explain the frequent appearance of a price puzzle in monetary price analysis. An econometrician follows common practice of including only output in the Vector Auto Regression (VAR). However, when the model is tested on U.S. data, all predictions are supported, and a commodity price index is unnecessary.

United States, Prices, Economics, Study and teaching, Economic theory

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