1. EC4004 Lecture 6
Markets and the Macroeconomy III Stephen Kinsella
The Business Cycle www.stephenkinsella.net

2. Last Time
Markets -> Macroeconomy
Intertemporal Sub. Effect
Message: Households Respond
over time to changes in interest
rates

3. This Time:
Business Cycles

4. Definition
A non repeating pattern of economic
growth and contraction about a trend.

5. Model

6. US Data

7. US Data

8. Irish Data
Log Consumption blue and GDP red in Ireland, 1970 2006
25.5
25.0
24.5
24.0
23.5
23.0
22.5
5 10 15 20 25 30 35