Macroeconomic priorities and crash states

Macroeconomic priorities and crash states

This paper reproduces Lucas's analysis of the costs of business cycles in an economy with a low probability, crash state in consumption growth. It is shown that the presence of a crash state dramatically increases the costs of consumption volatility.

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Bibliographische Detailangaben
Veröffentlicht in:Economics letters 2007, Vol.94 (1), p.64-70
1. Verfasser: Salyer, Kevin D.
Format: Artikel
Sprache:eng
Schlagworte:
Aggregate analysis
Business cycles
Consumption
Crash states
Macroeconomics
Volatility
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Beschreibung
Zusammenfassung:This paper reproduces Lucas's analysis of the costs of business cycles in an economy with a low probability, crash state in consumption growth. It is shown that the presence of a crash state dramatically increases the costs of consumption volatility.
ISSN:0165-1765
1873-7374
DOI:10.1016/j.econlet.2006.08.003