What Have Macroeconomists Learned About Business Cycles from the Study of Seasonal Cycles?
47 Pages Posted: 25 May 2006
Date Written: September 1995
This paper argues that analysis of seasonal fluctuations can shed light on the nature of business cycle fluctuations. The fundamental reason is that in many instances identifying restrictions about seasonal fluctuations are more believable than analogous restrictions about non-seasonal fluctuations. We show that seasonal fluctuations provide good examples of preference shifts and synergistic equilibria. We also find evidence against production smoothing and in favor of unmeasured variation in labor and capital utilization. In some industries capacity constraints appear to bind.
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