Real-business-cycle models are assessed by their ability to mimic the covariances and variances of actual business cycle data. Recently, however, advocates of RBC models have used them to fit the historical path of real ...

The 1970s witnessed the rise of two fashionable macroeconomic schools of thought--monetarism and the so-called "new classical" macroeconomics, the latter usually closely identified with one of the fundamental components, ...