BUSINESS CYCLES - THEORY, EVIDENCE AND POLICY IMPLICATIONS

This paper looks at recent advances in the study of aggregate fluctuat ions. The emphasis is on three prominent areas of research: the stocha stic growth model, economies which exhibit macroeconomic complementari ties and models that emphasize heterogeneity. Each section of the pape r outlines the theory, examines relevant empirical evidence and then d iscusses some policy implications of the analysis.