Talk:Real business-cycle theory

Removing intro

The intro to this article, though good, is the appropriate intro to the business cycle article, not the real business cycle article. I'll add it to the talk page over there, and work it in soon. Mgw 02:05, 24 October 2006 (UTC)

Major edits

I'm in the middle of some major edits, the article is in a wierd space right now. Mgw 02:49, 24 October 2006 (UTC)

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Yankee White --

I touched up some spelling and the introduction, adding that the recognition of government intervention as the cause of the nasty swings in the business cycle as central to RBC theory (although not in those exact words).

This article's introduction ought to differ from the introduction on other pages of the Business Cycles as a whole, since I'd argue RBC theory is far less detached from financial statecraft and a better explanation of the Business cycle than the Austrian School (ie: Austrians refer to the 1920's as a fake growth period induced by monetary policy, whilst RBC theorists hold it to be a genuine boom, which was slowly disintegrated by massive amounts of government intervention (especially once the depression set in)).

-- Yankee White

71.224.208.65 if you look through the history has preferred to take his claims to the actual article rather than on the discussion page.

My edits to the introductory paragraph, as well as touching up the many spelling errors in this thread, are consistent with Reality.

A major branch of Philosophy is Politics and Political-Economy cannot be separated, to do so would drop the requisite context and invalidate your arguments -- RBC holds that the Government is the cause of inflation through Seniorage and RBC holds that financial markets are always in equilibrium -- as someone who uses RBC to trade the financial markets (especially by watching trends in Gold) I understand that the efficient market hypothesis is true as well as rational expectations and anyone who accepts RBC must accept these premises and recognize that Government intervention causes a massive change in the structure of production (this being the fountainhead as I mentioned of RBC).

Stop being a damn subjectivist and realize that things are what they are, no matter how much you hope you're right, you're wrong, and facts cannot be established by consensus -- this is why I do advanced research into topics before I edit them.

Two proposed changes

The next time I swing by this page I will consider making two changes. (1) The real business cycle model is very simple when explained with economic jargon and a few first-order conditions, so the author devoted an unwieldy middle portion of the article to explaining micro jargon. I don't think this is the right approach to take in WP. If there are no objections I may try to craft a non-technical explanation. (2) I believe it is worth spelling out why, precisely, unemployment poses a model for Prescott and Kydland, given that the explanation is (a) simple (b) relatively compelling (c) explains why the real business cycle is not mainstream in economic theory. 140.247.163.157 06:21, 2 February 2007 (UTC)

dominates the academic literature

The current text of the article makes this statement without qualification: "Economists have come up with many ideas to answer the above question. The one which currently dominates the academic literature was introduced"

This implies that there is widespread agreement about RBCT among economists. I think that this is only really true amongst a particular group of economists, and that the other branch of economists is distinguished primarily by disagreement with RBCT.

Either way, this is a statement of opinion that is provided without citation. I recommend that we either (1) provide evidence that there is widespread agreement with RBCT, or (2) that we remove the commentary about the economic profession and stick to the facts.128.97.68.15 (talk) 21:52, 19 February 2009 (UTC)

Additions

I've only read some about the theory but it seems as if it has gained more acceptance than it had in 1986 when the article which the criticism part is based of was published. Prescott and Kydland got the Nobel prize in economics in 2004.

Moreover, George W. Stadler published an article in 1994 that explained the model in a simple way and what it usually consists of. If someone wants to have a go at it, it would probably ease the understanding for readers. —Preceding unsigned comment added by 130.235.234.245 (talk) 08:47, 2 February 2010 (UTC)

The graphs need improvement since the series are not identified. — Preceding unsigned comment added by 130.39.171.137 (talk) 12:15, 12 October 2011 (UTC)

Some ways in which this article's tone or style are not appropriate for Wikipedia

Lack of sufficient sourcing for any business cycle theory.

Fails to compare RBC to other business cycle theories in a comprehensible way.

Professorial tone, rather than encyclopedic Why is it full of rhetorical questions? To allow simplistic answers.

Prolix.

Thoroughly unbalanced -- suggests there is but a single answer to why there is a business cycle, that being the RBC theory. Heavy POV, lack of objectivity.

That such non-encyclopedic writing and one-sided presentation of a fringe viewpoint has been allowed to endure so long reflects the very small relevance of RBC theory to actual economics. What remains is designed to appeal to those who understand no other theory and are new to the issue of the business cycle and are ready to swallow whole whatever they are fed.

Is the policy prescriptions of the RBC theory that workers should be thrown into the street without social protections and be forced to be re-hired at whatever much-lower compensation business wishes to offer them? Whatever the policy prescriptions may be, both the prescriptions and their effects on the lives of working families are conspicuously absent from this discussion. —Preceding unsigned comment added by 66.167.61.16 (talk) 21:16, 2 January 2011 (UTC)

This entire comment is pointless, useless, and almost completely incorrect.137.54.22.71 (talk) 15:15, 21 January 2011 (UTC)

While I am not an economist, I concur with the inappropriate tone of the article. It has: 1) No citations; just references. 2) Rhetorical questions. 3) Leading the reader. Remarks like, "Observing ..., we come to the burning question of why any of this occurs" and "So the key question really is: ..." are the tone of a thesis, not an encyclopedic article. I can resolve issues 2) and 3), if there are not objections. — Preceding unsigned comment added by FunkmasterC2 (talk • contribs) 02:50, 1 February 2012 (UTC)

Commentators have cogently noted this article's flaws, which the author objects to out of hand. The intro to cyclical macro phenomena is fine, but probably more useful for the business cycle page, not RBC. I like the graphs, which are clearly presented, if oversized. But they aren't referenced; where did the data come from? And the policy assumptions are egregious. RBC uses an econometric model to stylize econ fluctuations. Where the model doesn't fit, RBC economists selected gov't as providing the most likely consumption shock. Statistically, such ex-post manipulations add little explanatory, and even less policy prescription, value. Finally, I find the author's appeal to his/her "gold trading" career as logical evidence quite revealing. Unless he/she provides this personal investment model, with inputs, results, and predictions, in other words presents an econometric model, it's a bogus statement. Gold bugs clamor for recognition without providing evidence. — Preceding unsigned comment added by 208.80.117.214 (talk) 22:07, 15 April 2012 (UTC)

Dr. Mandelman's comment on this article

Dr. Mandelman has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

"The one which currently dominates the academic literature"

this statement is very strong and highly controversial.

The article ignores the link between rational expectations theory and the RBC model. They are tightly linked and a potential reader should be aware of this.

We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.

We believe Dr. Mandelman has expertise on the topic of this article, since he has published relevant scholarly research:

• Reference : Mandelman, Federico S. & Zanetti, Francesco, 2013. "Flexible prices, labor market frictions, and the response of employment to technology shocks," Working Paper 2013-16, Federal Reserve Bank of Atlanta.

ExpertIdeasBot (talk) 15:21, 11 July 2016 (UTC)