Papers

Question 1

Lucas (1987) evaluation

Answer 1

We should care much more about growth than business cycles

Question 2

Criticisms of HP filter

Answer 2

Nelson and Kang (1981) - spurious cycles
James D Hamilton - regress on past 4 values instead
Alternative is Baxter-King filter (1999)

Question 3

King and Rebelo (1999)

Answer 3

Business cycle statistics

Question 4

Kaldor (1957)

Answer 4

long-term growth facts

Question 5

Hall (1978)

Answer 5

Utility well approximated by quadratic

consumption changes should be unpredictable (by income but is by stock market prices)

Question 6

Ways to generate AK framework

Answer 6

Harrod (1939) Domar (1946)
Frankel (1962) - knowledge externalises
Arrow (1962) - learning by doing
Lucas (1988) - human capital

Question 7

Uses of AK

Answer 7

King and Rebelo (1991) - fiscal policy on growth
Jones, Manuelli and Stachetti (1999) - macro volatility on growth
Acemogu and Ventura (2003) - terms of trade on growth
Jones and Manuelli (2005) - Handbook survey

Question 8

King, Plosser and Rebelo (1988)

Answer 8

characterise set of utility functions which admit a balanced growth path

Question 9

Greenwood, Hercowitz and Huffman (1988)

Answer 9

Labour choice affects utility from consumption
But no wealth effect
Not consistent with BGP

Question 10

Barro and King (1984)

Answer 10

Cons and labour both only procyclical if wage is procyclical

Question 11

Brock- Mirman Economy

Answer 11

log utility, 100% depreciation

Question 12

Campbell calibration

Answer 12

estimate parameters from the data and vary a couple

not beyesian

Question 13

Blanchard-Kahn approach

Answer 13

Matrix solving non indeterminant system of equations

Question 14

Who showed aggregate-wage cyclicality underestimates individual wage cyclicality

Answer 14

Barsky, Solon and Parker

Question 15

Implicit contracts where observed per-period wages are not allocative

Answer 15

Barro idea

Hall 2006 recent empirical application

Question 16

Hansen indivisible Labour Model

Answer 16

lottery labour market

Question 17

Shapiro-Stiglitz model

Answer 17

efficiency/ no-shirking wages

Question 18

Deamon-Mortensen-Pissarides model

Answer 18

Search and matching

Pissarides (2000)

Question 19

Who embed search in RBC to see GE business cycle implications

Answer 19

Merz (1995)

Andolfatto (1995)

Question 20

Abel (1990)

Answer 20

Habits model

Question 21

Smets and Wouters (2007)

Answer 21

external habits

also investment adjustment costs

Question 22

Christiano, Eichenbaum and Evans (2005)

Answer 22

Internal habits

also investment adjustment costs

Question 23

Deep habits defined at product level

Answer 23

Ravn, Schmitt-Grohe and Uribe (2006)

Question 24

Tobin’s q

Answer 24

relationshib btwn mkt value of installed capital and replacement costs of capital

Question 25

Holt, Modigliani, Muth and Simon (1960)

Answer 25

Production smoothing

Question 26

Blinder (1986)

Answer 26

production smoothing model doesn't fit facts

Question 27

True Solow residuals which are much smaller (capacity utilisation and labour hoarding)

Answer 27

Basu Fernald and Kimball (2001) | same relationship found by Gali using VAR

Question 28

Christiano et al (2004)

Answer 28

get tfp up hours up

Question 29

Fisher (2005)

Answer 29

investment-specific technology shocks

Question 30

Epstein and Zin (1989)

Answer 30

recursive utility infinite horizon

Question 31

Gourio (2012)

Answer 31

Disaster model with EZ, time-varying prob

Question 32

Gilchrist and Zakrajsek (2012)

Answer 32

Default risk spread is best predictor of recession

Question 33

(Kiyotaki and Moore, 1997)

Answer 33

endogenous borrowing limits/ collateral constraints

Question 34

(Eggertsson and Krugman, 2012)

Answer 34

borrowing constraints

Question 35

Lucas critique year

Answer 35

1976

Question 36

Friedman and Schwartz

Answer 36

short run monetary policy non-neutrality

Question 37

Lucas (1982):

Answer 37

CIA

Question 38

Nakamura and Steinssen 2008

Answer 38

7-11 month price duration excluding sales

Question 39

Fuhrer and Moore (QJE, 1995)

Answer 39

Inflation autocorrelated

Question 40

Gali Gertler

Answer 40

rule of thumb firms