Non-nested Tests of Three Competing Theories of Business Cycles

Authors

Abdur Chowdhury, Marquette UniversityFollow
James McGibany, Marquette UniversityFollow
Farrokh Nourzad, Marquette UniversityFollow

Document Type

Article

Language

eng

Format of Original

8 p.

Publication Date

5-1994

Publisher

Taylor & Francis (Routledge)

Source Publication

Applied Economics

Source ISSN

0003-6846

Abstract

This paper tests the Keynesian, new classical and real business-cycle theories against each other as non-nested hypotheses using quarterly data for the US covering the period 1959:1–1989:2. The results indicate that no one theory stands out as the dominant explanation of the business cycle. This contrasts with the findings of earlier work which is mostly concerned with testing the Keynesian against the new classical theory. We find that the introduction of a third theory, the real business-cycle theory which accounts of real factors, blurs the distinction between the demand-sided Keynesian, and the new classical theories.

Comments

Applied Economics, Vol. 26, No. 5 (May 1994): 527-534. DOI.

Recommended Citation

Chowdhury, Abdur; McGibany, James; and Nourzad, Farrokh, "Non-nested Tests of Three Competing Theories of Business Cycles" (1994). Economics Faculty Research and Publications. 166.
https://epublications.marquette.edu/econ_fac/166