Equilibrium and cycles

The research agenda related to Real-Business-Cycle models (RBC) has shown a remarkable growth since its beginning, in the eighties. The first models of this kind departed from simple economies without imperfections and tried to explain short-run macroeconomic movements (cycles) from Walrasian general-equilibrium settings. Nowadays, RBC models are widely used in Macroeconomics, with a special emphasis on the quantitative aspects of economic fluctuations. The main goal of this paper is to provide a survey of the first stage of the RBC research agenda, since there is not a systematic survey of this literature available in Portuguese. Although there are several controversial results related to RBC models, its main contribution seems to be methodological, since these models had a profound impact on current macroeconomic modeling.

business cycles; new classical macroeconomics; rational expectations; real-business-cycle models


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