Comovement
Subtitle: it's not a puzzle
By: by Riccardo DiCecio.
Contributors: Federal Reserve Bank of St. Louis.
Series: Working paper ;; 2005-035A; Working paper (Federal Reserve Bank of St. Louis : Online) ;; 2005-035A.
Publisher: Federal Reserve Bank of St. Louis
Published: 2005
Place of publication: [St. Louis, Mo.]
Language: eng
Format: Electronic resource
Subjects: Business cycles.
Description: "A defining feature of business cycles is the comovement of inputs at the sectoral level with aggregate activity.  Standard models cannot account for this phenomenon.  This paper develops and estimates a two-sector dynamic general equilibrium model which can account for this key regularity.  My model incorporates three shocks to the economy: monetary policy shocks, neutral technology shocks, and embodied technology shocks in the capital producing sector.  The estimated model is able to account for the response of the US economy to all three shocks.  Using this model, I argue that the key friction underlying sectoral comovement is rigidity in nominal wages"--Federal Reserve Bank of St. Louis web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 7/12/2005.
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Mode of access: World Wide Web.