Technology shocks, structural breaks and the effects on the business cycle

Atella, Vincenzo; Centoni, Marco; Cubadda, Gianluca

doi:10.1016/j.econlet.2008.03.011

Cited by 7 publications

(2 citation statements)

References 15 publications

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“…For example, one can use actual economic time series, such as commodity prices, that have been tested for deterministic chaos [14,21,34,68]. Moreover, shocks other than technology shocks can be considered, in view of the on-going debate between two literatures supporting and rejecting the importance of technology shocks for generating business cycles [12,37,54].…”

Section: Discussionmentioning

confidence: 99%

Exogenous Versus Endogenous for Chaotic Business Cycles

Akhmet

Akhmetova²,

Fen³

2016

DNC

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We propose a novel approach to generate chaotic business cycles in a deterministic setting. Rather than producing chaos endogenously, we consider aggregate economic models with limit cycles and equilibriums, subject them to chaotic exogenous shocks and obtain chaotic cyclical motions. Thus, we emphasize that chaotic cycles, which are inevitable in economics, are not only interior properties of economic models, but also can be considered as a result of interaction of several economical systems. This provides a comprehension of chaos (unpredictability, lack of forecasting) and control of chaos as a global economic phenomenon from the deterministic point of view.We suppose that the results of our paper are contribution to the mixed exogenous-endogenous theories of business cycles in classification by P.A. Samuelson [76]. Moreover, they demonstrate that the irregularity of the extended chaos can be structured, and this distinguishes them from the generalized synchronization. The advantage of the knowledge of the structure is that by applying instruments, which already have been developed for deterministic chaos one can control the chaos, emphasizing a parameter or a type of motion. For the globalization of cyclic chaos phenomenon we utilize new mechanisms such that entrainment by chaos, attraction of chaotic cycles by equilibriums and bifurcation of chaotic cycles developed in our earlier papers.

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Section: Discussionmentioning

confidence: 99%

Exogenous Versus Endogenous for Chaotic Business Cycles

Akhmet

Akhmetova²,

Fen³

2016

DNC

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“…In more deeply investigating the impacts of technology shocks or supply shocks, it was found that the research papers in the past have revealed some interesting findings; for instance, the introduction of the RBC models has been influential in refocusing attention on supply issues in macroeconomic analyses after the long postwar focus on aggregate demand management in Australia and most other Western economies (Crosby & Otto 1995). Meanwhile, research on the importance of technology shocks on the US business cycle has sharply decreased after a structural break in the late 1960s (Atella et al 2008). At the same time, the RBC model has been further developed for looking at specific issues of shocks in a wide range of areas, e.g., the issue of how representative consumers have to do housework and how shocks in this area can affect the real business cycle (Benhabib et al 1991), the application of the RBC model to the durableand nondurable-goods-producing sectors (Hornstein & Praschnik 1997;Martín-Moreno et al 2014)…”

Section: Literature Reviewmentioning

confidence: 99%

Impacts of Technological Shock on the Agricultural Business Cycle

Jaroensathapornkul¹

2020

JEM

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The real business cycles in ASEAN-5 countries namely Indonesia, Malaysia, the Philippines, Thailand, and Vietnam over 1971-2015 fluctuated more than their agricultural business cycles. This research utilized the two-sector real business cycle model developed by Da-Rocha and Restuccia (2002) to stimulate such a stylized fact. The model assumes that a social planner makes a decision in an initial period to choose the consumption, capital stock, and working hours in the agricultural and non-agricultural sectors. This will enable a representative agent to attain optimum utility for the entire life under certain economic restrictions and subject to technology shocks occurring in both sectors. The mathematical methods applied to solve this decision-making problem for the social planner includes linear quadratic approximations and stochastic dynamic programming methods. The simulation results suggest that the applied model could reasonably well replicate the fluctuations of the real business cycle, agricultural business cycle, and the non-agricultural business cycle. This reflects the situation where technology shocks in the agricultural and non-agricultural sectors are related to each other and influence the volatility of these two economies.This suggest that the governments should encourage research and development activities in both agricultural and non-agricultural sectors to develop new technology that can generate technology shock to promote greater economic strength.

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Economic Models with Exogenous Continuous/Discrete Shocks

Akhmet

Fen

2015

Nonlinear Physical Science

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Technology shocks, structural breaks and the effects on the business cycle

Cited by 7 publications

References 15 publications

Exogenous Versus Endogenous for Chaotic Business Cycles

Exogenous Versus Endogenous for Chaotic Business Cycles

Impacts of Technological Shock on the Agricultural Business Cycle

Economic Models with Exogenous Continuous/Discrete Shocks

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