Macroeconomic Frictions : What have we learned from the Real Business Cycle research programme ?

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Serval ID
serval:BIB_CB991481449B
Type
A part of a book
Collection
Publications
Institution
Title
Macroeconomic Frictions : What have we learned from the Real Business Cycle research programme ?
Title of the book
Advances in Macroeconomic Theory
Author(s)
Danthine J.-P., Donaldson J.B.
Publisher
Palgrave
Publication state
Published
Issued date
2001
Editor
Drèze J.
Language
english
Abstract
One interpretation of the RBC research program is that it was meant to identify and incorporate into dynamic general equilibrium models those market imperfections which are most relevant for macroeconomic theory and policy. This paper reviews the methodological basis for this interpretation. It then discusses the empirical foundations for some of the many frictions that have found their way into RBC models including efficiency wages, labour contracts, nominal price rigidities, limited market participation, imperfect competition and expectational errors. We find that the ?necessity? of these frictions is better established in some cases than in others. While one is lead to the prediction that the ?next neo-classical synthesis? will be a dynamic stochastic general equilibrium with frictions, it is premature to decide which specific friction will necessarily be taken on board.
Create date
19/11/2007 10:48
Last modification date
20/08/2019 15:46
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