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News-Driven Business Cycles: Insights and Challenges

Beaudry, P; Portier, F; (2014) News-Driven Business Cycles: Insights and Challenges. Journal of Economic Literature , 52 (4) pp. 993-1074. 10.1257/jel.52.4.993. Green open access

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Abstract

There is a widespread belief that changes in expectations may be an important independent driver of economic fluctuations. The news view of business cycles offers a formalization of this perspective. In this paper we discuss mechanisms by which changes in agents' information, due to the arrival of news, can cause business cycle fluctuations driven by expectational change, and we review the empirical evidence aimed at evaluating their relevance. In particular, we highlight how the literature on news and business cycles offers a coherent way of thinking about aggregate fluctuations, while at the same time we emphasize the many challenges that must be addressed before a proper assessment of the role of news in business cycles can be established. (JEL D83, D84, E13, E32, O33)

Type: Article
Title: News-Driven Business Cycles: Insights and Challenges
Open access status: An open access version is available from UCL Discovery
DOI: 10.1257/jel.52.4.993
Publisher version: http://dx.doi.org/10.1257/jel.52.4.993
Language: English
Additional information: This version is the version of record. For information on re-use, please refer to the publisher’s terms and conditions.
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/10040000
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