Business Cycle

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Isabelle Mejean - One of the best experts on this subject based on the ideXlab platform.

  • the micro origins of international Business Cycle comovement
    The American Economic Review, 2018
    Co-Authors: Julian Di Giovanni, Aleksandr Alekseevitsh Levchenko, Isabelle Mejean
    Abstract:

    This paper investigates the role of individual firms in international Business Cycle comovement using data covering the universe of French firm-level value added, bilateral imports and exports, and cross-border ownership over the period 1993-2007. At the micro level, controlling for firm and country effects, trade in goods with a particular foreign country is associated with a significantly higher correlation between a firm and that foreign country. In addition, foreign multinational affiliates operating in France are significantly more correlated with the source economy. The impact of direct trade and multinational linkages on comovement at the micro level has significant macro implications. Because internationally connected firms are systematically larger than non-internationally connected firms, the firms directly linked to foreign countries represent only 8% of all firms, but 56% of all value added, and account for 75% of the observed aggregate comovement. Without those linkages the correlation between France and foreign countries would fall by about 0.091, or one-third of the observed average Business Cycle correlation of 0.29 in our sample of partner countries. These results are evidence of transmission of Business Cycle shocks through direct trade and multinational ownership linkages at the firm level.

  • large firms and international Business Cycle comovement
    The American Economic Review, 2017
    Co-Authors: Julian Di Giovanni, Aleksandr Alekseevitsh Levchenko, Isabelle Mejean
    Abstract:

    This paper investigates the role of the top 100 firms in France in aggregate Business Cycle comovement. We establish that the top 100 firms (i) are important in aggregate; (ii) exhibit stronger international linkages than the rest of the economy; and (iii) contribute substantially to aggregate comovement.

Lawrence J Christiano - One of the best experts on this subject based on the ideXlab platform.

  • habit persistence asset returns and the Business Cycle
    The American Economic Review, 2001
    Co-Authors: Michele Boldrin, Lawrence J Christiano, Jonas D M Fisher
    Abstract:

    Two modifications are introduced into the standard real-Business-Cycle model: habit preferences and a two-sector technology with limited intersectoral factor mobility. The model is consistent with the observed mean risk-free rate, equity premium, and Sharpe ratio on equity. In addition, its Business-Cycle implications represent a substantial improvement over the standard model. It accounts for persistence in output, comovement of employment across different sectors over the Business Cycle, the evidence of "excess sensitivity" of consumption growth to output growth, and the "inverted leading-indicator property of interest rates," that interest rates are negatively correlated with future output.

  • current real Business Cycle theories and aggregate labor market fluctuations
    The American Economic Review, 1990
    Co-Authors: Lawrence J Christiano, Martin Eichenbaum
    Abstract:

    Hours worked and the return to working are weakly correlated. Traditionally, the ability to account for this fact has been a litmus test for macroeconomic models. Existing real-Business-Cycle models fail this test dramatically. The authors modify prototypical real-Business-Cycle models by allowing government consumption shocks to influence labor-market dynamics. This modification can, in principle, bring the models into closer conformity with the data. Their empirical results indicate that it does. Copyright 1992 by American Economic Association.

Martin Eichenbaum - One of the best experts on this subject based on the ideXlab platform.

  • current real Business Cycle theories and aggregate labor market fluctuations
    The American Economic Review, 1990
    Co-Authors: Lawrence J Christiano, Martin Eichenbaum
    Abstract:

    Hours worked and the return to working are weakly correlated. Traditionally, the ability to account for this fact has been a litmus test for macroeconomic models. Existing real-Business-Cycle models fail this test dramatically. The authors modify prototypical real-Business-Cycle models by allowing government consumption shocks to influence labor-market dynamics. This modification can, in principle, bring the models into closer conformity with the data. Their empirical results indicate that it does. Copyright 1992 by American Economic Association.

Mark Weder - One of the best experts on this subject based on the ideXlab platform.

  • Observations on the Australian Business Cycle
    Journal of Business Cycle Research, 2016
    Co-Authors: Nopphawan Photphisutthiphong, Mark Weder
    Abstract:

    What accounts for the Australian Business Cycle, what caused the economic slumps and what factors contributed to the decades’ buoyancy? To understand these questions, the current paper decomposes the Australian Business Cycle into its sources for the period 1980–2014. Our main finding is that the efficiency wedge and the investment wedge are the major forces behind Australian output variations. The efficiency wedge is behind the growth slowdown that emerged in the mid 2000s.

  • News about aggregate demand and the Business Cycle
    Journal of Monetary Economics, 2015
    Co-Authors: Jang Ting Guo, Anca Ioana Sirbu, Mark Weder
    Abstract:

    The plausibility of expectations-driven cyclical fluctuations in an otherwise standard one-sector real Business Cycle model with variable capital utilization and mild increasing returns-to-scale in production is examined. Due to a dominating wealth effect, our model is able to generate qualitatively as well as quantitatively realistic aggregate fluctuations driven by news impulses to future consumption demand or government spending on goods and services. When the economy is subject to anticipated total factor productivity or investment-specific technology shocks, the relative strength of the intertemporal substitution effect needs to be enhanced for our model to exhibit positive macroeconomic co-movement and Business Cycle statistics that are consistent with the data.

  • Animal spirits, technology shocks and the Business Cycle
    Journal of Economic Dynamics and Control, 2000
    Co-Authors: Mark Weder
    Abstract:

    This paper presents a two-sector growth model which allows indeterminacy to occur at relatively mild degrees of increasing returns. It is shown that economies of scale need only be present in one sector of the economy, e.g. the investment good producing sector. This new feature of the model builds on evidence that was recently reported by , (Journal of Political Economy 105, 249-283) and others. The time series that are generated by the model have properties that are comparable to the real U.S. postwar data. The sunspot driven model is also able to solve some puzzles of Business Cycle research which standard Real Business Cycle models have not been able to explain.

Julian Di Giovanni - One of the best experts on this subject based on the ideXlab platform.

  • the micro origins of international Business Cycle comovement
    The American Economic Review, 2018
    Co-Authors: Julian Di Giovanni, Aleksandr Alekseevitsh Levchenko, Isabelle Mejean
    Abstract:

    This paper investigates the role of individual firms in international Business Cycle comovement using data covering the universe of French firm-level value added, bilateral imports and exports, and cross-border ownership over the period 1993-2007. At the micro level, controlling for firm and country effects, trade in goods with a particular foreign country is associated with a significantly higher correlation between a firm and that foreign country. In addition, foreign multinational affiliates operating in France are significantly more correlated with the source economy. The impact of direct trade and multinational linkages on comovement at the micro level has significant macro implications. Because internationally connected firms are systematically larger than non-internationally connected firms, the firms directly linked to foreign countries represent only 8% of all firms, but 56% of all value added, and account for 75% of the observed aggregate comovement. Without those linkages the correlation between France and foreign countries would fall by about 0.091, or one-third of the observed average Business Cycle correlation of 0.29 in our sample of partner countries. These results are evidence of transmission of Business Cycle shocks through direct trade and multinational ownership linkages at the firm level.

  • large firms and international Business Cycle comovement
    The American Economic Review, 2017
    Co-Authors: Julian Di Giovanni, Aleksandr Alekseevitsh Levchenko, Isabelle Mejean
    Abstract:

    This paper investigates the role of the top 100 firms in France in aggregate Business Cycle comovement. We establish that the top 100 firms (i) are important in aggregate; (ii) exhibit stronger international linkages than the rest of the economy; and (iii) contribute substantially to aggregate comovement.