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Conference on Aggregation and Propagation of Cyclical Shocks

Sponsored by:
Department of Economics, Cornell University
Federal Reserve Bank of Minneapolis
Department of Economics, UCLA
October 11-12, 1996
Friday, October 11
9:00 a.m. Continental breakfast
Session 1: Credit and Business Cycles
Chair: Roger Farmer
9:30 a.m. “Credit Chains”
Nobuhiro Kiyotaki, University of Minnesota, and John Moore, London School of Economics
  Discussant: David Levine, UCLA
10:40 a.m. Break
10:50 a.m. “Credit and Economic Activity: Shocks or Propagation Mechanism?”
Nathan S. Balke and Chih-Ping Chang, Southern Methodist University and Federal Reserve Bank of Dallas
  Discussant: James Hamilton, University of California, San Diego
12:00 p.m. Lunch
Session 2: Indivisibilities and Capacity Utilization
Chair: Edward C. Prescott
2:00 p.m. “Toward an Endogenous Propagation Theory of Business Cycles”
Paul Beaudry and Michael B. Devereaux, University of British Columbia
  Discussant: Thomas F. Cooley, University of Rochester
3:10 p.m. Coffee break
3:30 p.m. “Machine Replacement and the Business Cycle: Lumps and Bumps”
Russell Cooper, Boston University, John Haltiwanger, University of Maryland, and Laura Power, Department of Treasury
  Discussant: John Kennan, University of Wisconsin
4:40 p.m. Break
4:50 p.m. “Plant Level Irreversible Investment and Equilibrium Business Cycles”
Marcelo Veracierto, Cornell University
  Discussant: Tryphon Kollintzas, Athens University of Economics
7:00 p.m. Reception and conference dinner
Saturday, October 12
9:00 a.m. Continental breakfast
Session 3: Monetary Propagation
Chair: Costas Azariadis
9:30 a.m. “Expectation Traps and Discretion”
V.V. Chari, University of Minnesota, Lawrence J. Christiano, Northwestern University, and Martin Eichenbaum, Northwestern University
  Discussant: Michele Boldrin, Universidad Carlos III
10:40 a.m. Break
10:50 a.m. “Policy Uncertainty and Informational Monopolies: The Case of Monetary Policy”
Rodolfo Manuelli, University of Wisconsin, and Larry Jones, Northwestern University
  Discussant: Scott Freeman, University of Texas–Austin
12:00 p.m. Lunch
2:00 p.m. “Aggregate Fluctuations, Financial Constraints and Risk Sharing”
Pamela Labadie, George Washington University
  Discussant: Costas Azariadis, UCLA
3:10 p.m. Coffee break
Session 4: Aggregation and Returns to Scale
Chair: Gary D. Hansen
3:30 p.m. “Aggregate Production Function Failures and Business Cycle Analysis”
Susanto Basu, University of Michigan, John Fernald, Federal Reserve Board of Governors, and Michael Horvath, Stanford University
  Discussant: Robert E. Hall, Stanford University
4:40 p.m. Break
4:50 p.m. “Optimal Sectoral Shifts”
Christopher Phelan and Alberto Trejos, Northwestern University
  Discussant: John Fernald, Federal Reserve Board of Governors