New study challenges traditional beliefs about business cycle fluctuations!
Conflicting views on what causes business cycles are often due to different beliefs about how prices and wages adjust. Some researchers found that U.S. prices have moved in the opposite direction of the economy since 1954, suggesting that demand-driven models of the cycle might not be accurate. They used a new method called "stylized-facts" to reach this conclusion, which was different from the traditional "system-of-equations" approach.