A plucking model of business cycles

• 成果类型: Article
• 署名作者: Dupraz, Stephane; Nakamura, Emi; Steinsson, Jon
• 署名单位: European Central Bank; Bank of France; University of California System; University of California Berkeley
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2025.103766
• 发表日期: 2025
• 关键词: Downward Nominal Rigidity; Stabilization Policy; labor search

摘要

In standard models, economic activity fluctuates symmetrically around a natural rate and stabilization policies can dampen these fluctuations but do not affect the average level of activity. An alternative view-labeled the plucking model by Milton Friedman-is that economic fluctuations are drops below the economy's full potential ceiling. We show that the dynamics of the unemployment rate in the US display a striking asymmetry that strongly favors the plucking model: increases in unemployment are followed by decreases of similar amplitude, while the amplitude of a decrease does not predict the amplitude of the following increase. In addition, business cycles last seven years on average and unemployment rises much faster during recessions than it falls during expansions. We augment a standard labor search model with downward nominal wage rigidity and show how it can fit the plucking property.