TY  - BOOK
AU  - Jaimovich,Nir
AU  - Rebelo,Sergio
ED  - National Bureau of Economic Research.
TI  - Can News About the Future Drive the Business Cycle?
T2  - NBER working paper series
PY  - 2006///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - September 2006; Hardcopy version available to institutional subscribers
N2  - Aggregate and sectoral comovement are central features of business cycle data. Therefore, the ability to generate comovement is a natural litmus test for macroeconomic models. But it is a test that most existing models fail. In this paper we propose a unified model that generates both aggregate and sectoral comovement in response to contemporaneous shocks and news shocks about fundamentals. The fundamentals that we consider are aggregate and sectoral TFP shocks as well as investment-specific technical change. The model has three key elements: variable capital utilization, adjustment costs to investment, and a new form of preferences that allow us to parameterize the strength of short-run wealth effects on the labor supply
UR  - https://www.nber.org/papers/w12537
UR  - http://dx.doi.org/10.3386/w12537
ER  -