Real Business Cycles:Theory,Empirics and Disputes

The research in the RBC theory is related to the methodologies and hypotheses postulated by different economists regarding some basic properties of our economy.It also reflects the disputes between two major schools in economics,that is, the Keynesian and the neoclassical. This paper introduces to the reader systematically the framework of RBC and the techniques for solving and testing RBC models.It also explores the problems and issues in RBC research and pro- poses future research directions and possible developments in macroeconomics in general.