Question

Why are the main proposition of the real business cycle model?

Answer 1

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The real business cycle theory relies on three assumptions which according to economists such as Greg Mankiw and Larry Summers are unrealistic:

The model is driven by large and sudden changes in available production technology

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Answer 2

The real business cycle theory relies on three assumptions which according to economists such as Greg Mankiw and Larry Summers are unrealistic:

The model is driven by large and sudden changes in available production technology