No abstract available. No abstract available.
Recessions have, however, become somewhat less frequent and more uniform.
It argues that the advent of macroeconomic policy after World War II can account for both the observed continuity and change. Countercyclical monetary policy and automatic stabilizers have prolonged postwar expansions and prevented severe depressions. At the same time, policy-induced booms and recessions have led to continued volatility of the postwar economy. This paper examines business cycles theoretically and empirically, with a quantitative study based on data for a cross section of countries. Theoretical concerns indicate that the properties of business cycle models depend not only on important structural aspects of the model, such as money neutrality, labor market structure, and price adjustment, but also on the closure of the model in international markets.