Autori
Ubide, Angel J.
Lopez, Humberto

Titolo
Demand, supply, and animal spirits
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1996 - Fascicolo: 32 - Pagina iniziale: 1 - Pagina finale: 26

One of the main topics of macroeconomics analysis is to assess the causes and transmission of business cycles. In order to address this issue, macroeconomists have analysed the response of output to different types of shocks. However, since a shock is by definition an unobserved variable, there is no consensus in the literature about how to properly identify a shock. In this paper we present a framework for identification of shocks that builds on the statistical definition of a shock and imposes as little a priori restrictions as possible on the structure of the system. We apply our methodology to U.S. data, and identify three different shocks, demand/spending, supply/productivity and animal spirits/preferences. We conclude that over the last oO years the U.S. economy has been driven by a blend of the three shocks, being the demand/spending shock more important for the short run variability and during recessions, and the supply shock for the long run trend. However, the last U.S. recession of the 90's seems to have been caused by a combination of both supply and animal spirits disturbances, finally, we show that, with our identification, there is evidence of positive demand non-neutralities in the long run in the U.S. economy.



Testo completo: http://hdl.handle.net/1814/604

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