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Monetary business cycle accounting for Sweden

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  • Brinca Pedro

    (Department of Economics, Stockholm University, SE–106 91 Stockholm, Sweden)

Abstract

When creating competing models of economic fluctuations, researchers typically introduce frictions in their models aiming at replicating the observed movements in the data. This paper implements a business cycle accounting procedure for the Swedish economy. Both the 1990s and the 2008 recessions are given special focus. Evidence is provided for properties that structural extensions to the business cycle model need to have in order to replicate the movements in the data. Distortions to the labor market and movements in total factor productivity are the most determinant features to be modeled with respect to real variables as well as deviations from a Taylor rule for interest rate setting, though the latter plays little role for both the 1990s and the 2008 recessions. The distortions share a structural break during the 1990s crisis but not during the recent one.

Suggested Citation

  • Brinca Pedro, 2013. "Monetary business cycle accounting for Sweden," The B.E. Journal of Macroeconomics, De Gruyter, vol. 13(1), pages 1085-1119, October.
    • Handle: RePEc:bpj:bejmac:v:13:y:2013:i:1:p:35:n:29
    DOI: 10.1515/bejm-2013-0027
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    12. Roman Sustek, 2011. "Monetary Business Cycle Accounting," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(4), pages 592-612, October.
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    Cited by:

    1. Matheus Cardoso Leal & Marcio Issao Nakane, 2022. "Brazilian economy in the 2000’s: A tale of two recessions," Working Papers, Department of Economics 2022_20, University of São Paulo (FEA-USP).
    2. Pedro Brinca & Nikolay Iskrev & Francesca Loria, 2022. "On Identification Issues in Business Cycle Accounting Models," Advances in Econometrics, in: Essays in Honour of Fabio Canova, volume 44, pages 55-138, Emerald Group Publishing Limited.
    3. Brinca, P. & Chari, V.V. & Kehoe, P.J. & McGrattan, E., 2016. "Accounting for Business Cycles," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 1013-1063, Elsevier.
    4. Pedro Brinca & João Ricardo Costa Filho & Francesca Loria, 2024. "Business cycle accounting: What have we learned so far?," Journal of Economic Surveys, Wiley Blackwell, vol. 38(4), pages 1276-1316, September.
    5. Brinca, Pedro & Costa-Filho, João, 2021. "Economic depression in Brazil: the 2014-2016 fall," MPRA Paper 107298, University Library of Munich, Germany.
    6. Hirata, Hideaki & Otsu, Keisuke, 2016. "Accounting for the economic relationship between Japan and the Asian Tigers," Journal of the Japanese and International Economies, Elsevier, vol. 41(C), pages 57-68.
    7. Kshitiz Mishra & Partha Chatterjee, 2021. "Monetary Business Cycle Accounting Analysis of Indian Economy," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 19(3), pages 471-491, September.
    8. Dooyeon Cho & Dong-Eun Rhee, 2015. "An assessment of inflation targeting in a quantitative monetary business cycle framework: evidence from four early adopters," Applied Economics, Taylor & Francis Journals, vol. 47(32), pages 3395-3413, July.
    9. Fernando del Río & Francisco‐Xavier Lores, 2023. "Accounting for the role of investment frictions in recessions," Economica, London School of Economics and Political Science, vol. 90(360), pages 1089-1118, October.
    10. Almosova, Anna & Burda, Michael C. & Voigts, Simon, 2020. "Social Security Contributions and the Business Cycle," Journal of Macroeconomics, Elsevier, vol. 65(C).
    11. Brinca, Pedro, 2014. "Distortions in the neoclassical growth model: A cross-country analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 47(C), pages 1-19.
    12. Fernandes, Daniel, 2022. "Business Cycle Accounting for the COVID-19 Recession," MPRA Paper 111577, University Library of Munich, Germany.
    13. repec:hum:wpaper:sfb649dp2017-018 is not listed on IDEAS
    14. Almosova, Anna & Burda, Michael C. & Voigts, Simon, 2017. "Social Security Contributions and the Business Cycle," SFB 649 Discussion Papers 2017-018, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    15. del Río, Fernando & Lores, Francisco-Xavier, 2021. "Accounting for U.S. economic growth 1954–2017," Economic Modelling, Elsevier, vol. 101(C).
    16. Louise Holm, 2016. "The Swedish business cycle, 1969-2013," OECD Journal: Journal of Business Cycle Measurement and Analysis, OECD Publishing, Centre for International Research on Economic Tendency Surveys, vol. 2015(2), pages 1-22.
    17. Scholl, Christoph, 2022. "COVID-19 and the GDP fall in Germany: A Business Cycle Accounting Approach," MPRA Paper 111570, University Library of Munich, Germany.
    18. Brinca, Pedro, 2014. "Distortions in the neoclassical growth model: A cross-country analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 47(C), pages 1-19.
    19. del Río, Fernando & Lores, Francisco-Xavier, 2023. "Accounting for the role of investment frictions in recessions," MPRA Paper 116024, University Library of Munich, Germany.
    20. del Río, Fernando & Lores, Francisco-Xavier, 2020. "Accounting for U.S. post-war economic growth," MPRA Paper 100716, University Library of Munich, Germany.

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    More about this item

    Keywords

    business cycle accounting; economic fluctuations; frictions; JEL Classification: E31; E32; E37; E43;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects

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