Real business cycle theory is a theory that suggests that business cycles are a result of technological changes and the availability of resources.

The cause of the business cycle is changes in the fundamental economic factors. When these factors change, the equilibrium quantities and relative prices change ...

Since the middle of the 1970s two quite different approaches to the explanation of business cycle fluctuations have been pursued.

Business cycles are created by rational agents responding optimally to real (not nominal) shocks - mostly fluctuations in productivity growth, but also ...

RBC theory is a class of new classical macroeconomics models in which business-cycle fluctuations are accounted for by real (in contrast to nominal) shocks. Business cycles · Stylized facts · Calibration · Criticisms

RBC models demonstrate that, even in such environments, cycles can arise through the reactions of optimizing agents to real disturbances, such as random ...

Summary. RBC theory has developed indigenous methods of business cycle analysis. Filter developed by Hodrick and Prescott aimed at removing time series from ...

This section of the textbook focuses on explaining the behavior of the busi- ness cycle. The terms business cycle, short-run macroeconomics, and eco-.

The RBC theory is based on two basic principles: (i) money has little role to play in business cycles, and (ii) business cycles occur as a response of rational ...

Since the middle of the 1970s two quite different approaches to the explanation of business cycle fluctuations have been pursued.