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Structural testing of Business Cycles

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  • Esa Mangeloja

    (University of Jyvaskyla)

Abstract

In this article, the predictability performance of certain classical business cycle theories are tested against contemporary statistical methods by using Finnish macroeconomic data. Keynesian multiplier- accelerator model derivatives and neo-classical real business cycle models are compared to statistical stochastic time-series methods. Some philosophical considerations on the scientific principles and macroeconomic analysis are extended for applied econometric practice. VAR and SUTSE models are estimated and compared against classical theory implications. It is found that in this case, SUTSE model has a superior forecasting ability and that pure statistical algorithms are the most efficient alternatives for predicting Finnish business cycle data.

Suggested Citation

  • Esa Mangeloja, 2003. "Structural testing of Business Cycles," Macroeconomics 0308004, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpma:0308004
    Note: Type of Document - pdf; prepared on PC- LaTex; pages: 20 ; figures: included
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/mac/papers/0308/0308004.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Business Cycle; Real Business Cycle Theory; VAR; SUTSE; multiplier-acceleration;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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