Real Business Cycle
Definition
A new classical theory of fluctuations driven by real shocks (mostly to productivity) in a flexible-price market-clearing economy.
Example
RBC models attribute most of US GDP fluctuations to technology shocks.
A new classical theory of fluctuations driven by real shocks (mostly to productivity) in a flexible-price market-clearing economy.
RBC models attribute most of US GDP fluctuations to technology shocks.