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Other schools of economic thought, such as new classical macroeconomics, [citation needed] hold that countercyclical policies may be counterproductive or destabilizing, and therefore favor a laissez-faire fiscal policy as a better method for maintaining an overall robust economy. When the government adopts a countercyclical fiscal policy in ...
Business cycle accounting is an accounting procedure used in macroeconomics to decompose business cycle fluctuations into contributing factors. The procedure was introduced by V. V. Chari, Patrick Kehoe, and Ellen McGrattan but is similar to techniques introduced earlier. The underlying premise of the procedure is that the economy has a long ...
Intellectual capital does not affect a company stock's current earnings. Intellectual capital contributes to a stock's return growth. [40] Unlike long-term trends, medium-term data fluctuations are connected to the monetary policy transmission mechanism and its role in regulating inflation during an economic cycle.
US federal minimum wage if it had kept pace with productivity. Also, the real minimum wage. Real macroeconomic output can be decomposed into a trend and a cyclical part, where the variance of the cyclical series derived from the filtering technique (e.g., the band-pass filter, or the most commonly used Hodrick–Prescott filter) serves as the primary measure of departure from economic stability.
In economics, a trough is a low turning point or a local minimum of a business cycle. The time evolution of many economics variables exhibits a wave-like behavior with local maxima (peaks) followed by local minima (troughs). A business cycle may be defined as the period between two consecutive peaks. [1] [2]
Experimental economics researchers have demonstrated how sunspots could affect economic activity. [ 7 ] The name is a whimsical reference to 19th-century economist William Stanley Jevons , who attempted to correlate business cycle patterns with sunspot counts (on the actual sun ) on the grounds that they might cause variations in weather and ...
Real business-cycle theory (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. [1] RBC theory sees business cycle fluctuations as the efficient response to exogenous changes in the real economic environment.
Econometric analysis of DSGE models suggested that real factors sometimes affect the economy. A paper by Frank Smets and Rafael Woulters (2007) [ae] stated that monetary policy explained only a small part of the fluctuations in economic output. [192] In new synthesis models, shocks can affect both demand and supply. [185]