Real Business Cycle Models in Economics
By Warren Young
To Be Published December 10th 2013 by Routledge – 288 pages
The purpose of this book is to describe the intellectual process by which Real Business Cycle models developed. The approach taken focuses on the core elements in the development of RBC models: (i) building blocks, (ii) catalysts, and (iii) meta-syntheses. This is done by detailed examination of all available unpublished variorum drafts of the key papers in the RBC story, so as to determine the origins of the ideas. The analysis of the process their discovery is then set out followed by explanations of the evolution and dissemination of the models, from first generation papers through full blown research programs. This is supplemented by interviews and correspondence with the individuals who were at the center of the development of RBC models, such as Kydland, Prescott, Long, Plosser, King, Lucas and Barro, among others.
This book gets stright to the heart of the debates surrounding RBC models and as such contributes to a real assessment of their impact on modern macroeconomics. The volume, therefore, will interest all scholars looking at macroeconomics as well as historians of economic thought more generally.
Introduction Part 1: Origins: Building Blocks and Catalysts 1. Optimal and Stochastic Growth Models, RCE, Calibration, and Critiques of Control Theory and Econometrics 2. Equilibrium, Understanding and Classical Modeling of Business Cycles and the Economy: Lucas, Barro and Sargent (1976) Models 3. Dynamics of Economic Time-Series and Time-Series Filters 4. Kydland-Prescott: Time Inconsistency and Time-to-Build 5. Long-Plosser and King-Plosser 6. Cross-Fertilization, Referees and Revision Part 2: Evolution and Dissemination 7. The Monetary and Work-Hours Sting in the Tail: First Generation Models of Kydland and Prescott and Their Students 8. Long-Plosser, King-Plosser and King-Plosser-Rebelo: From Multi-Sector to One-Sector General Models 9. Modern Business Cycle Theory: Barro and McCallum Challenges: Critiques and Debates in Freshwater and Saltwater Venues 10. The "New Keynesian" Challenge: Nominal and Real Rigidities in Macroeconomics 11. Second and Third Generation Models: The Issues of Work-Hours and Sticky Prices and Their Inclusion in Generalized RBC Monetary Models 12. Critiques and Debates: From Altug, Heckman and Summers to Gali-Basu-Kimball Critiques and Replies. Conclusion