The Business Cycle and Industry Comovement

FRB Richmond Economic Quarterly, Vol. 86, No. 1, Winter 2000, pp. 27-48

22 Pages Posted: 28 Nov 2012

Date Written: 2000

Abstract

The U.S. business cycle is characterized by the general increase and decrease of activity across all industries. When the pattern of industry comovement (documented here) is compared to corresponding properties of multi-sector growth models, a striking mismatch appears. Simply put, the basic multi-sector model has trouble accounting for the pattern of comovement. This problem holds whether one attributes the source of the business cycle to independent industry shocks or to mutually shared aggregate shocks.

Suggested Citation

Hornstein, Andreas, The Business Cycle and Industry Comovement (2000). FRB Richmond Economic Quarterly, Vol. 86, No. 1, Winter 2000, pp. 27-48. Available at SSRN: https://ssrn.com/abstract=2126580

Andreas Hornstein (Contact Author)

Federal Reserve Bank of Richmond ( email )

P.O. Box 27622
Richmond, VA 23261
United States
804-697-8266 (Phone)
804-697-8255 (Fax)

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