电子科技大学：《高级宏观经济学 Advanced Macroeconomics》课程教学资源（课件讲稿）Lecture 05 Real Business Cycle Theory（RBC）

ADVANCED MACROECONOMICS Lecture 5 Real Business Cycle Theory 电子科大经管学院马捷

ADVANCED MACROECONOMICS Lecture 5 Real Business Cycle Theory 电子科大经管学院 马捷 1

Outline -Stylized Facts about Business Cycles From New Classicals to RBC ·RBC Models Major Contributions Criticisms 电子科大经管学院马捷 2 元元元元

Outline  Stylized Facts about Business Cycles  From New Classicals to RBC  RBC Models  Major Contributions  Criticisms 电子科大经管学院 马捷 2

Stylized Facts 1.Cycles vary a lot in amplitude and duration. 2.Output movements in many sectors display a high degree of coherence. 3.Investment and durable goods production is much more volatile than output. 4.Nondurable goods consumption is less volatile than output. 5.Velocity of money is countercyclical in most countries. 电子科大经管学院马捷 3

Stylized Facts 1. Cycles vary a lot in amplitude and duration. 2. Output movements in many sectors display a high degree of coherence. 3. Investment and durable goods production is much more volatile than output. 4. Nondurable goods consumption is less volatile than output. 5. Velocity of money is countercyclical in most countries. 电子科大经管学院 马捷 3

6.The relationship of monetary aggregates and output is highly variable. 7.Long-term interest rates are less volatile than short- term interest rates. 8.Short-term interest rates are almost always positively correlated with output. 9.Long-term interest rates are have a negative or zero correlation with output. 10. Prices levels are procyclical. 11. Employment is as variable as output,and positively correlated. 12. Productivity is less volatile than output 电子科大经管学院马捷

6. The relationship of monetary aggregates and output is highly variable. 7. Long-term interest rates are less volatile than short￾term interest rates. 8. Short-term interest rates are almost always positively correlated with output. 9. Long-term interest rates are have a negative or zero correlation with output. 10. Prices levels are procyclical. 11. Employment is as variable as output, and positively correlated. 12. Productivity is less volatile than output. 电子科大经管学院 马捷 4

Motivation Both the Solow model I and the neoclassical growth model predict per capita income grows at a constant rate. What policy can we use to avoid the fluctuations of economies away from the optimal allocations? Technological progress is either exogenously determined or grow at constant rates. 电子科大经管学院马捷 5

Motivation  Both the Solow model and the neoclassical growth model predict per capita income grows at a constant rate.  What policy can we use to avoid the fluctuations of economies away from the optimal allocations?  Technological progress is either exogenously determined or grow at constant rates. 电子科大经管学院 马捷 5

From New Classicals to RBC The NCE challenged Keynesian theory,and stimulated the development of NK and RBC Theory NK theory accepts the REH,but emphasizes the importance of imperfect competition,costly or impeded price adjustments,and externalities.It argues that nominal shocks are the predominant cause of business cycles. 电子科大经管学院马捷 6

From New Classicals to RBC  The NCE challenged Keynesian theory, and stimulated the development of NK and RBC Theory  NK theory accepts the REH, but emphasizes the importance of imperfect competition, costly or impeded price adjustments, and externalities. It argues that nominal shocks are the predominant cause of business cycles. 电子科大经管学院 马捷 6

RBC theory accepts the REH,but views cycles arising in frictionless,perfectly competitive economies with complete markets.It argues that cycles arise through the reactions of optimizing agents to real disturbances,such as random changes in technology or productivity. Guess the model??? 电子科大经管学院马捷

 RBC theory accepts the REH, but views cycles arising in frictionless, perfectly competitive economies with complete markets. It argues that cycles arise through the reactions of optimizing agents to real disturbances, such as random changes in technology or productivity.  Guess the model??? 电子科大经管学院 马捷 7

Features of RBC Models Like New Classical Economics,the RBC theorists agree that: ·Agents optimize ·Markets clear Therefore,the business cycle is an equilibrium phenomenon, and is optimal! 电子科大经管学院马捷 8 元元兄

Features of RBC Models  Like New Classical Economics, the RBC theorists agree that: • Agents optimize • Markets clear  Therefore, the business cycle is an equilibrium phenomenon, and is optimal! 电子科大经管学院 马捷 8

Features of RBC Models Adopt a representative agent model,focusing on rep.household and firm,agents homogeneous, so that there are no aggregation problems. All agents have rational expectations. All markets continually clear There are complete markets. There are no informational asymmetries problems. 电子科大经管学院马捷 9

 Adopt a representative agent model, focusing on rep. household and firm, agents homogeneous, so that there are no aggregation problems.  All agents have rational expectations.  All markets continually clear.  There are complete markets.  There are no informational asymmetries problems. 电子科大经管学院 马捷 9 Features of RBC Models

Firms and households optimize explicit objective functions,subject to resource and technology constraints The cycle is driven by an exogenous shock to productivity. The impact of productivity is amplified by intertemporal s substitution of leisure. The increase in productivity raises the opportunity cost of leisure,causing employment to increase. 电子科大经管学院马捷 10

 Firms and households optimize explicit objective functions, subject to resource and technology constraints.  The cycle is driven by an exogenous shock to productivity.  The impact of productivity is amplified by intertemporal substitution of leisure. The increase in productivity raises the opportunity cost of leisure, causing employment to increase. 电子科大经管学院 马捷 10