Business Cycle Theory

‘. . . this book is long overdue and its selection of by now classic business cycle papers is an excellent articulation of the Lucas/real business cycle agenda that merits a home on every inquiring macroeconomist’s bookshelf.’
– C. Ryan, The Economic Journal

This volume is a collection of key articles on modern business cycle theory. Fundamental to business cycle theory is the estimation of the role played by different impulses or shocks for aggregate fluctuations, and identifying the mechanisms by which these impulses propagate over time to create the cycles we observe.

Business Cycles Theory is divided into three parts. Part I deals with issues of measurement and methodology and describes empirical business cycle regularities. Parts II and III centre around the study of real and nominal shocks and impulses.

CONTENTS

PART I

PRELIMINARIES OF BUSINESS CYCLE THEORY

1. Ragnar Frisch (1933), ‘Propagation Problems and Impulse Problems in Dynamic Economics’
2. Robert M. Solow (1957), ‘Technical Change and the Aggregate {Production Function’
3. Robert E. Lucas, Jr. (1980), ‘Methods and Problems in Business Cycle Theory’
4. Finn E. Kydland and Edward C. Prescott (1990), ‘Business Cycles:” Real Facts and a Monetary Myth’

PART II

MONETARY SHOCKS AND CREDIT MECHANISMS

5. Robert E. Lucas, Jr. (1977), ‘Understanding Business Cycles’
6. Robert E. Lucas, Jr. (1972), ‘Expectations and the Neutrality of Money’
7. John B. Taylor (1979), ‘Staggered Wage Setting in a Macro Model’
8. Robert G. King and Charles I. Plosser (1984), ‘Money, Credit, and Prices in a Real Business Cycle’
9. Scott Freeman and Gregory W. Huffman (1991), ‘Inside Money, Output, and Causality’
10. Olivier Jean Blanchard and Nobuhiro Kiyotaki (1987), ‘Monopolistic Competition and the Effects of Aggregate Demand’
11. Ben Bernanke and Mark Gertler (1989), ‘Agency Costs, Net Worth, and Business Fluctuations’
12. Thomas F. Cooley and Gary D. Hansen (1989), ‘The Inflation Tax in a Real Business Cycle Model’
13. Ayse Imrohoroglu (1989), ‘Cost of Business Cycles with Indivisibilities and Liquidity Constraints’
14. Timothy S. Fuerst (1992), ‘Liquidity, Loanable Funds, and Real Activity’

PART III

REAL SHOCKS

15. Finn E. Kydland and Edward C. Prescott (1982), ‘Time to Build and Aggregate Fluctuations’
16. John B. Long Jr. and Charles I. Plosser (1983), ‘Real Business Cycles’
17. Gary D. Hansen (1985), ‘Indivisible Labor and the Business Cycle’
18. Finn E. Kydland and Edward C. Prescott (1991), ‘Hours and Employment Variation in Business Cycle Theory’
19. Jean-Pierre Danthine and John B. Donaldson (1990), ‘Efficiency Wages and the Business Cycle Puzzle’
20. Lawrence J. Christiano and Martin Eichenbaum (1992), ‘Current Real-Business-Cycle Theories and Aggregate Labor-Market Fluctuations’
21. Julio J. Rotemberg and Michael Woodford (1992), ‘Oligopolistic Pricing and the Effects of Aggregate Demand on Economic Activity’
22. Jess Benhabib, Richard Rogerson and Randall Wright (1991), ‘Homework in Macroeconomics: Household Production and Aggregate Fluctuations’
23. Jeremy Greenwood and Zvi Hercowitz (1991), ‘The Allocation of Capital and Time Over the Business Cycle’