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- W2055136905 abstract "In the past ten or so years, there has been a revival of interest in equilibrium models of the business cycle. The view had been that accounting for the persistence of cyclical movements in output and other important aggregates would be an extremely challenging, if not impossible, task with such models. The important paper by Lucas (1972) led to models which are consistent with monetary shocks resulting in persistent equilibrium movements of real aggregates.' The key to these results was the richness of the information structure, and it was only natural that less effort went into developing the details of propagation mechanisms that might be present on the real side of the economy. Although there was an underlying notion that the economy is inhabited by optimizing agents who process information efficiently within the specified information sets, it was not always necessary to work out the optimization part explicitly in order to bring home the point of this research. Instead, simple formulations emphasizing intertemporal substitution effects and intended to mimic such dynamic behavior were often used. Several factors may have contributed to a recent trend in the direction of analyzing models of the aggregate economy in which decisions are derived from explicitly formulated optimization problems. First, there was the realization that the parameters of these optimization problems are part of what we will ultimately want to estimate in order to evaluate systematic" @default.
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- W2055136905 date "1984-01-01" @default.
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- W2055136905 title "Labor-force heterogeneity and the business cycle" @default.
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