Home » Correlation 1.0 0.9 0.8 0.?

Correlation 1.0 0.9 0.8 0.?

As we can see from the graphic below, the simulated real business cycle (RBC) model fits real world data quite well with the exception of average labor productivity (the bars on the far right hand side of the graphic). In particular, the real world data suggests that average labor productivity is weakly pro-cyclical with the correlation between average labor productivity and output between 0.3 and 0.4. The simulated correlation from the RBC model over 0.8, clearly not consistent with the facts. Given these results, we say that the simulated RBC model implies that average labor productivity is more pro-cyclical than it actually is.

We then argued that when we add fiscal (Government spending) shocks to the RBC model, this ” average labor productivity is too pro-cyclical” problem is lessoned since the theory implies that in a fiscal shock world, all else constant, average labor productivity tends to be slightly counter-cyclical. In the space below, explain in detail how average labor productivity is slightly counter-cyclical in a “fiscal shock” world. Be sure to support your arguments with a labor market diagram and a production function labeling the initial equilibrium (before the fiscal shock) as point A and the subsequent equilibrium (after the fiscal shock) as point B. Be sure to explain exactly why workers and firms change their behavior given the fiscal shock.Comment on how the RBC theorists felt about discretionary counter-cyclical fiscal policy and why (i.e., “hands off” or “hands on?”).

Correlation 1.0 0.9 0.8 0.? 0.5 05 0A 0.3 0.2 0.1 0.0 ReaEGNF Consumption Investment – ActualSimulated usin- 9 the REC model inventory Total hours Productivity stocks worked Variable

Show more

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10