Replication data for: A Theory of Demand Shocks

Principal Investigator(s):  View help for Principal Investigator(s) Guido Lorenzoni

Version:  View help for Version V1

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Project Citation: 

Lorenzoni, Guido. Replication data for: A Theory of Demand Shocks. Nashville, TN: American Economic Association [publisher], 2009. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E113343V1

Project Description

Summary:  View help for Summary This paper presents a model of business cycles driven by shocks to consumer expectations regarding aggregate productivity. Agents are hit by heterogeneous productivity shocks, they observe their own productivity and a noisy public signal regarding aggregate productivity. The public signal gives rise to "noise shocks," which have the features of aggregate demand shocks: they increase output, employment, and inflation in the short run and have no effects in the long run. Numerical examples suggest that the model can generate sizable amounts of noise-driven volatility. (JEL D83, D84, E21, E23, E32)

Scope of Project

JEL Classification:  View help for JEL Classification
      D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
      D84 Expectations; Speculations
      E21 Macroeconomics: Consumption; Saving; Wealth
      E23 Macroeconomics: Production
      E32 Business Fluctuations; Cycles


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V1 [2019-10-12]

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