MARC Record from Library of Congress

LEADER: 02249nam a22003017a 4500
001 2011657538
003 DLC
005 20120214093551.0
007 cr |||||||||||
008 120214s2011 mau sb 000 0 eng
010 $a 2011657538
040 $aDLC$cDLC
050 00 $aHB1
100 1 $aBeaudry, Paul.
245 10 $aDo mood swings drive business cycles and is it rational?$h[electronic resource] /$cPaul Beaudry, Deokwoo Nam, Jian Wang.
260 $aCambridge, MA :$bNational Bureau of Economic Research,$cc2011.
490 1 $aNBER working paper series ;$vworking paper 17651
538 $aSystem requirements: Adobe Acrobat Reader.
538 $aMode of access: World Wide Web.
500 $aTitle from PDF file as viewed on 2/14/2012.
530 $aAlso available in print.
504 $aIncludes bibliographical references.
520 3 $a"This paper provides new evidence in support of the idea that bouts of optimism and pessimism drive much of US business cycles. In particular, we begin by using sign-restriction based identification schemes to isolate innovations in optimism or pessimism and we document the extent to which such episodes explain macroeconomic fluctuations. We then examine the link between these identified mood shocks and subsequent developments in fundamentals using alternative identification schemes (i.e., variants of the maximum forecast error variance approach). We find that there is a very close link between the two, suggesting that agents' feelings of optimism and pessimism are at least partially rational as total factor productivity (TFP) is observed to rise 8-10 quarters after an initial bout of optimism. While this later finding is consistent with some previous findings in the news shock literature, we cannot rule out that such episodes reflect self-fulfilling beliefs. Overall, we argue that mood swings account for over 50% of business cycle fluctuations in hours and output"--National Bureau of Economic Research web site.
700 1 $aNam, Deokwoo.
700 1 $aWang, Jian.
710 2 $aNational Bureau of Economic Research.
830 0 $aWorking paper series (National Bureau of Economic Research : Online) ;$vworking paper no. 17651.
856 40 $uhttp://www.nber.org/papers/w17651