What's real about the business cycle?
By: James D. Hamilton.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 11161; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 11161.
Publisher: National Bureau of Economic Research
Published: 2005
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Business cycles -- Mathematical models.
Description: "This paper argues that a linear statistical model with homoskedastic errors cannot capture the nineteenth-century notion of a recurring cyclical pattern in key economic aggregates.  A simple nonlinear alternative is proposed and used to illustrate that the dynamic behavior of unemployment seems to change over the business cycle, with the unemployment rate rising more quickly than it falls.  Furthermore, many but not all economic downturns are also accompanied by a dramatic change in the dynamic behavior of short-term interest rates.  It is suggested that these nonlinearities are most naturally interpreted as resulting from short-run failures in the employment and credit markets, and that understanding these short-run failures is the key to understanding the nature of the business cycle"--National Bureau of Economic Research web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 3/2/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.