Journal Article
Granger causality and equilibrium business cycle theory
Abstract: Postwar U.S. data show that consumption growth \\"Granger-causes\\" output and investment growth, which is puzzling if technology is the driving force of the business cycle. The author asks whether general equilibrium models with information frictions and non-technology shocks can rationalize the observed causal relationships. His conclusion is they cannot.
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Bibliographic Information
Provider: Federal Reserve Bank of St. Louis
Part of Series: Review
Publication Date: 2007
Volume: 89
Issue: May
Pages: 195-206