Day 4: Thursday

A Basic Dynamic Equilibrium Model

 

Overview: Robert E. Lucas, Jr., “Methods and Problems in Business Cycle Theory,” Journal of Money, Credit and Banking (PDF)

 

Lecture 7: The Real Business Cycle Hypothesis

 

* Finn Kydland and Edward C. Prescott, “Time to Build and Aggregate Fluctuations,” Econometrica, 1982 (PDF)

 

* John Long and Charles Plosser, “Real Business Cycles”, Journal of Political Economy, 1983 (PDF)

 

Lecture 8: Real Business Cycle Mechanics, New and Old

 

* Robert King , Charles Plosser and Sergio T. Rebelo, “Production, Growth and Business Cycles, I. The Basic Neoclassical Model,” Journal of Monetary Economics, 21, no. 2/3 (May 1988): 195-232 (PDF).

 

R.G. King and S. Rebelo, “Resuscitating Real Business Cycles,” Handbook of Macroeconomics (PDF)

 

Presentation Materials

Lecture 7 outline (PDF)

Lecture 8 outline (PDF): these materials not covered in class during 2010, but students should review them as part of IHW.

 

Study Problems

 

Supplementary readings attached to lecture 8 (KPR technical appendix)