Non-nested tests of three competing theories of business cycles
AR Chowdhury, JM McGibany, F Nourzad - Applied Economics, 1994 - Taylor & Francis
AR Chowdhury, JM McGibany, F Nourzad
Applied Economics, 1994•Taylor & FrancisThis 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 …
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 …
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.
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