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Please explain in three well-structured paragraphs the basic arguments stated by the Real-Business-Cycle (RBC) Theory, regarding economic fluctuations.The real business cycle theory has been evolved out of the American new classical school of 1980s. It isthe outcome of research mainly by Kydland and Prescott, Barro and King, Long and Plosser, and Prescott.Later, Plosser, Summers, Mankiw and many other economists gave their views of the real business cycles.They view aggregate economic variables as the outcomes of the decisions made by many economicagents acting to maximize their utility subject to production possibilities and resource constraints. Theirviews mainly relate to technology shocks, labour market, interest rate, role of money, fiscal policy, pricesand wages in business cycles. They are explained belowThe theory of real business cycles explains short-run economic fluctuations based on the assumptions ofthe classical theory. According to this theory, business cycles are the natural and efficient response of the