This chapter reviews and synthesizes our current understanding of the shocks that drive
economic fluctuations. The chapter begins with an illustration of the problem of identifying …

The rational expectations hypothesis is a bedrock of modern macroeconomics. It is often
combined with a strong, complementary hypothesis that all data about the state of the …

This investigation explores whether sustainable finance and renewable energy could
facilitate US carbon neutrality. We perform the time-varying parameter-stochastic volatility …

This paper illustrates how to handle a sequence of extreme observations—such as those
recorded during the COVID‐19 pandemic—when estimating a vector autoregression, which …

We develop a new class of general-equilibrium models with partially unfunded debt to
propose a fiscal theory of persistent inflation. In response to business cycle shocks, the …

Economists and economic policymakers believe that households' and firms' expectations of
future inflation are a key determinant of actual inflation. A review of the relevant theoretical …

This chapter provides an overview of and user's guide to dynamic factor models (DFMs),
their estimation, and their uses in empirical macroeconomics. It also surveys recent …

We study how monetary policy in China influences banks' shadow banking activities. We
develop and estimate the endogenously switching monetary policy rule that is based on …

The Fiscal Theory of the Price Level Page 1 Page 2 The Fiscal Theory of the Price Level john h.
cochrane princeton university press princeton and oxford Page 3 Copyright c 2023 by …

We identify structural vector autoregressions using narrative sign restrictions. Narrative sign
restrictions constrain the structural shocks and/or the historical decomposition around key …