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Putting Home Economics Into Macroeconomics

Quarterly Review 1731 | Summer 1993

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Putting Home Economics Into Macroeconomics


The implications of adding household production to an otherwise standard real business cycle model are explored in this article. The model developed treats the business and household sectors symmetrically. In particular, both sectors use capital and labor to produce output. The article finds that the household production model can outperform the standard model in accounting for several aspects of U.S. business cycle fluctuations.

This is a summary of a chapter prepared for a book, _Frontiers of Business Cycle Research_, edited by Thomas F. Cooley, to be published by Princeton University Press (Princeton, NJ.). The article appears here with the permission of Princeton University Press.