Article
Non-nested Tests of Three Competing Theories of Business Cycles
Applied Economics
Document Type
Article
Language
eng
Format of Original
8 p.
Publication Date
5-1-1994
Publisher
Taylor & Francis (Routledge)
Disciplines
Abstract
This paper tests the Keynesian, new classical and real business-cycle theories against each other as non-nested hypotheses using quarterly data for the US covering the period 1959:1–1989:2. The results indicate that no one theory stands out as the dominant explanation of the business cycle. This contrasts with the findings of earlier work which is mostly concerned with testing the Keynesian against the new classical theory. We find that the introduction of a third theory, the real business-cycle theory which accounts of real factors, blurs the distinction between the demand-sided Keynesian, and the new classical theories.
Citation Information
Abdur Chowdhury, James McGibany and Farrokh Nourzad. "Non-nested Tests of Three Competing Theories of Business Cycles" Applied Economics (1994) ISSN: 0003-6846 Available at: http://works.bepress.com/abdur_chowdhury/23/
Applied Economics, Vol. 26, No. 5 (May 1994): 527-534. DOI.