Business Cycles in the Run of History

Revue française d'économie, 2010

2021

This paper proposes a reference quarterly dating for periods of expansion and recession in France since 1970, carried out by the Dating Committee of the French Economic Association (AFSE). The methodology used is based on two pillars: (i) econometric estimations from various key data to identify candidate periods, and (ii) a narrative approach that describes the economic background that prevailed at that time to finalize the dating chronology. Starting from 1970, the committee has identified four economic recession periods: the two oil shocks 1974-75 and 1980, the investment cycle of 1992-93, and the Great Recession 2008-09 spawned by the Global Financial Crisis. The peak before the Covid-19 recession has been dated to the last quarter of 2019. JEL classification: E32, E37, C24, N14.

Rational Econometric Man

3. Дж. М. Кейнс (допълнителни материали за курсова работа по "Икономически учения")

2006

In this paper, we review the basic notions and definitions of economic regime and regime switching. The purpose of this review is to describe how these notions appear implicitly or explicitly in different areas of the economic literature. We will not claim to offer a complete survey. The goal is to identify the basic themes that are common across the many sub-fields of the literature in which the concept is applied, and to develop a common terminology.

2008

The R word has begun to appear in the media again bringing with it three technical questions viz, How will we know we are in recession? How will we know when it has ended? And How can we forecast its onset and ending? This paper does not provide answers to these questions rather it focuses on the technical issues that we need to resolve in order to provide good answers to these questions. The paper has three significant findings. First, the business cycle states obtained by the BBQ algorithm are complex statistical processes and it is not possible to write down an exact likelihood function for them. Second, for the classical and acceleration cycles it is possible to obtain a reasonably simple approximation to the BBQ algorithm that may permit one to write down a likelihood function. Third, when evaluating these algorithms there is a large di¤erence between the results using US GDP as compared to UK GDP or simulated data from models fit to US GDP. Specifically, turning points are muc...

Journal of Economic Dynamics and Control, 2010

This paper studies an agent-based model that bridges Keynesian theories of demandgeneration and Schumpeterian theories of technology-fueled economic growth. We employ the model to investigate the properties of macroeconomic dynamics and the impact of public polices on supply, demand and the "fundamentals" of the economy. We find that the complementarities between factors influencing aggregate demand and drivers of technological change affect both "short-run" fluctuations and long-term growth patterns. From a normative point of view, simulations show a corresponding complementarity between Keynesian and Schumpeterian policies in sustaining long-run growth paths characterized by mild fluctuations and acceptable unemployment levels. The matching or mismatching between innovative exploration of new technologies and the conditions of demand generation appear to suggest the presence of two distinct "regimes" of growth (or absence thereof) characterized by different short-run fluctuations and unemployment levels.

Journal of Economic Literature, 2018

for useful comments and discussion; and to Steven Durlauf, Yannis Ioannides, and Robert Solow for detailed suggestions. I retain responsibility for all errors of omission and commission. My views are not necessarily endorsed by the Federal Reserve System. † Go to https://doi.org/10.1257/jel.20181439 to visit the article page and view author disclosure statement(s). Azariadis: A Review Essay on A History of Macroeconomics from Keynes to Lucas authoritative, much like the Michelin Red Guide to Paris. 2.2 The Ebb and Flow of Ideas Keynes and Lucas are the leading figures in De Vroey's historical account, with Keynes commanding the first thirty years of macroeconomics, roughly 1940-70, Lucas commanding for the next thirty, and an uneasy balance between Keynesians and Lucasians marking the most recent twenty years. This battle of ideas is dotted by transformational events, or "breaches," as De Vroey chooses to call them. Breach one was Keynes himself, together with some early proponents of Keynesian macroeconomics like Hicks (1937), Modigliani (1944), and Klein (1950). Ideas by Friedman (1968) and Phelps (1968) on the natural rate of unemployment mark breach two, while breach three is a long-lasting attempt by Patinkin (1956), Clower (1965), Leijonhufvud (1968), Barro and Grossman (1971), Benassy (1975), Dreze (1975), and Malinvaud (1977) to lift the Manhallian macroeconomics of Keynes to the technical level of Walrasian general equilibrium through quantity rather than price adjustments. The novel concept was "disequilibrium," which clears markets by rationing the long side of each one when prices or wages are rigid or predetermined; the goal was to find how rationing in goods or factor markets depended on exogenous selections of prices and wages. Breach four was DSGE, a radical departure from Keynes, led by Lucas (1972) who emphasized market clearing and rational expectations. Sargent (1976) and Barro (1977) were important early contributors in this endeavor to remake macroeconomics on classical or Walrasian microfoundations. De Vroey identifies as breach five a number of related ideas in the 1970s and 1980s that focus on imperfections in factor markets arising from incompleteness or private information. The end results of these frictions were labor contracts, efficiency wages, and credit rationing. Important contributors include Fischer (1977), Taylor (1980), and Stiglitz and Weiss (1981). Before frictions in factor markets had time to grow roots in the literature, they were swamped by the next wave of ideas, the RBC model of Kydland and Prescott (1982). Breach six was in effect the second coming of DSGE, now cast in the language of the Cass-Koopmans model of optimal economic growth. Augmented by persistent shocks to the aggregate production function, the Cass-Koopmans model underwent fluctuations in national income, and in its main components, which looked like postwar business cycles. On the minus side, RBC models provide no guide for economic policy because all fluctuations are socially optimal, particularly so for monetary policy, which has no place in the optimum growth model. Central bankers were understandably concerned about this feature and highly receptive to the last breach on De Vroey's list, breach seven. This one occurs mainly in the late 1990s and marks a partial return to Keynesian ideas and models like the investment-saving (IS) schedule and the Phillips curve. Among the protagonists of this reversal are Calvo (1983), Taylor (1993), Galí (1999), Rotemberg and Woodford (1997), and Christiano, Eichenbaum, and Evans (2005). 2.3 The Economics of Keynes De Vroey takes great pains to distill Keynes's research program without much help from the General Theory. His final list comes down to three items: (i) Splitting unemployment into frictional or "normal" and involuntary or "abnormal," the latter being a symptom of labor rationing and a byproduct of insufficient aggregate spending. (ii) Understanding the role of increased uncertainty (lack of reliable "news")

Business and Economic Research

This study uses the different versions of the Markov-Switching methodology for modeling business cycles in Turkey and determining their turning points through quarterly real GDP figures for the 1987-2021 period. Based on the results obtained from the models, the recovery periods in Turkey last approximately 8.5 quarters and exhibit long and permanent nature while contraction periods are short, variable, and temporary, lasting around 4 quarters on average. The estimated Markov-Switching models mostly produce the same turning points. The compatibility of the obtained results with the national and international developments experienced during the analyzing period indicates the consistency of the developed models. On the other hand, the results reveal the importance of consistent and credible monetary and fiscal policies in smoothing business cycles.

2020

This book follows the intellectual path of Franco Modigliani, Nobel Prize winner and one of the most influential Keynesian economists of the twentieth century, tracing his development and examining the impact of his research. The book begins with Modigliani's early work as a young law student in 1930s Italy and traces his development through his emigration to the U.S., his introduction to Keynes' General Theory at the New School for Social Research and his seminal 1944 article on Keynesian and classical economics. The book also discusses Modigliani's pioneering theory of savings: the life-cycle hypothesis with Richard Brumberg, further developed with Albert Ando, his contributions to decision-making under uncertainty and, finally, Modigliani's collaboration with the Federal Reserve Board for the building of its first macroeconometric model for the U.S. economy. The book argues that although Modigliani is placed amongst the most prominent Keynesian economists, if we look to his published works only, and with the exception of the 1944 article, his connections with Keynesian theory appears of secondary importance until the beginning of the 1960s when he joined MIT. Moreover, since then his contributions are much more on policy issues rather than theoretical ones. This is the first book to place Modigliani's thought in its proper historical and intellectual context, showing how it related to wider economic concerns and possible policy solutions. It will be of interest to scholars in the history of economic thought, and especially postwar American Keynesian economics.