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Microfounded Exogenous Explanations

  • Piero Ferri
  • Edward Greenberg

Abstract

Since the amount of literature on the business has increased greatly over time, it is important to consider criteria for a taxonomy. We think that the distinction between endogenous and exogenous explanations of business cycle is basic not only from an analytical view but also from an economic policy perspective. For these reasons we start classifying the literature on the basis of this distinction, which stresses the origin of the business cycle. The events and variables that are usually treated as exogenous include wars, changes in population, technology, weather, Government spending, and tax laws. They clearly can and often do have major economic consequences that affect the cyclical behavior of the economy. In addition to these factors, which usually show considerable persistence over time (in other words they are serially correlated), there are random shocks, which can be defined as uncorrelated disturbances (white noise) of various kinds that affect the economy.

Keywords

Labor Market Labor Supply Business Cycle Real Wage Rational Expectation 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag Berlin · Heidelberg 1992

Authors and Affiliations

  • Piero Ferri
    • 1
  • Edward Greenberg
    • 2
  1. 1.University of BergamoBergamoItaly
  2. 2.Department of EconomicsWashington UniversitySt. LouisUSA

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