Article1989

A Traditional Interpretation of Macroeconomic Fluctuations

386 citations0/0 files storedAmerican Economic Review

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Monetary Policy and Economic Impact Economic Theory and Policy Market Dynamics and Volatility

Abstract

Under the traditional interpretation of macroeconomic fluctuations, aggregate demand shocks move output and prices in the same direction, while aggregate supply shocks move output and prices in opposite directions. This paper examines the joint behavior of U.S. output, unemployment, prices, wages, and nominal money and asks whether it is consistent with this interpretation. The answer is a qualified yes. Copyright 1989 by American Economic Association.

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References

1987Co-Integration and Error Correction: Representation, Estimation, and Testing 1988The Dynamic Effects of Aggregate Demand and Supply Disturbances 1987Forecasting and testing in co-integrated systems 1986Alternative Explanations of the Money-Income Correlation 1987Effects of model specification on tests for unit roots in macroeconomic data 1984Are Business Cycles All Alike?

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