Sectoral shocks and aggregate fluctuations

• 成果类型: Article
• 署名作者: Horvath, M
• 署名单位: Stanford University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/S0304-3932(99)00044-6
• 发表日期: 2000
• 页码: 69-106
• 关键词: aggregate fluctuations; sectoral interaction; comovement; input-output

摘要

This paper presents a multisector dynamic general equilibrium model of business cycles with a distinctive feature: aggregate fluctuations are driven by independent sectoral shocks. The model hypothesizes that trade among sectors provides a strong synchronization mechanism for these shocks due to the limited, but locally intense, interaction that is characteristic of such input trade flows. Limited interaction, characterized by a sparse intermediate input-use matrix, reduces substitution possibilities among intermediate inputs which strengthens comovement in sectoral value-added and leads to a postponement of the law of large numbers in the variance of aggregate value-added. The chief virtue of this model is that reliance on implausible aggregate shocks is not necessary to capture the qualitative features of macroeconomic fluctuations. Building on Horvath, 1998, Review of Economic Dynamics 1, 781-808, which establishes the theoretical foundation for the relevance of limited interaction in the context of a stylized multisector model, this paper specifies a more general multisector model calibrated to the US 2-digit Standard Industrial Code economy. Simulations prove the model :is able to match empirical reality as closely as standard one-sector business cycle models without relying on aggregate shocks. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: E1; E32; C67.