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Lucas (1973) [r] proposed a business cycle theory based on rational expectations, imperfect information, and market clearing. While building this model, Lucas attempted to incorporate the empirical fact that there had been a trade-off between inflation and output without ceding that money was non-neutral in the short-run. [ 124 ]
Business cycles are a type of fluctuation found in the aggregate economic activity of nations that organize their work mainly in business enterprises: a cycle consists of expansions occurring at about the same time in many economic activities, followed by similarly general recessions, contractions, and revivals which merge into the expansion ...
His 1984 Macroeconomics textbook remains a standard for explaining the subject, and his 1995 book, with Columbia University economist Xavier Sala-i-Martin, on Economic Growth, is a widely cited and read graduate-level textbook on the theory and evidence concerning long-run economic growth. Barro's research in the 1990s was focused mainly on the ...
The Cobden Centre is a British economics think tank founded by Member of Parliament Steve Baker and entrepreneur Toby Baxendale. It was developed by and consists of proponents of the Austrian School of Economics.
The Austrian theory of the business cycle (ABCT) focuses on banks' issuance of credit as the cause of economic fluctuations. [84] Although later elaborated by Hayek and others, the theory was first set forth by Mises, who posited that fractional reserve banks extend credit at artificially low interest rates, causing businesses to invest in ...
Procyclical and countercyclical variables are variables that fluctuate in a way that is positively or negatively correlated with business cycle fluctuations in gross domestic product (GDP). The scope of the concept may differ between the context of macroeconomic theory and that of economic policy –making.
Classical economics focuses on the tendency of markets to move to equilibrium and on objective theories of value. Neo-classical economics differs from classical economics primarily in being utilitarian in its value theory and using marginal theory as the basis of its models and equations. Marxian economics also descends from classical theory.
Business cycle accounting is an accounting procedure used in macroeconomics to decompose business cycle fluctuations into contributing factors. The procedure was introduced by V. V. Chari, Patrick Kehoe, and Ellen McGrattan but is similar to techniques introduced earlier. The underlying premise of the procedure is that the economy has a long ...