Neoclassical Business Cycles

Aggregate data do not lend support to neoclassical business cycle models. Discuss this statement paying particular attention to inter-temporal decisions about consumption, labour/leisure and investment. According to Prescott the reason for business cycles is due to technology shocks which manifest itself as changes in the TFP productivity term (or Solow residual) A. Summers criticises this Read more about Neoclassical Business Cycles[…]