Do real business cycle models really exhibit business cycle behavior?

Previous research indicates that real business cycle models are capable of reproducing important features of U.S. business cycle behavior. Here I employ classical methods of business cycle analysis to determine how well the cyclical properties of simulated data from a representative real business cy...

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Bibliographic Details
Published in:Journal of monetary economics 1994-04, Vol.33 (2), p.381-404
Main Author: Simkins, Scott P
Format: Article
Language:English
Subjects:
Business cycles
Business fluctuations
Economic forecasting
Economic models
Forecasting and simulation
Forecasts
Monetary economics
Simulation
Studies
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Summary:Previous research indicates that real business cycle models are capable of reproducing important features of U.S. business cycle behavior. Here I employ classical methods of business cycle analysis to determine how well the cyclical properties of simulated data from a representative real business cycle model match up with postwar U.S. business cycle characteristics. While the simulated model reproduces qualitative features consistent with observed business cycle experience, quantitative goodness-of-fit tests show that for many sectors of the economy the cyclical characteristics of the simulated data deviate significantly from U.S. business cycle experience.
ISSN:0304-3932
1873-1295
DOI:10.1016/0304-3932(94)90007-8