Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/155444
Authors: 
Duarte, Pedro Garcia
Hoover, Kevin D.
Year of Publication: 
2011
Series/Report no.: 
CHOPE Working Paper 2011-09
Abstract: 
Shock is a term of art that pervades modern economics appearing in nearly a quarter of all journal articles in economics and in nearly half in macroeconomics. Surprisingly, its rise as an essential element in the vocabulary of economists can be dated only to the early 1970s. The paper traces the history of shocks in macroeconomics from Frisch and Slutzky in the 1920s and 1930s through real-business-cycle and DSGE models and to the use of shocks as generators of impulse-response functions, which are in turn used as data in matching estimators. The history is organized around the observability of shocks. Aswell as documenting a critical conceptual development in economics, the history of shocks provides a case study that illustrates, but also suggests the limitations of, the distinction drawn by the philosophers of science James Bogen and James Woodward between data and phenomena. The history of shocks shows that this distinction must be substantially relativized if it is to be at all plausible.
Subjects: 
shock
new classical macroeconomics
real-business-cycle model
Ragnar Frisch
Jan Tinbergen
Robert Lucas
data
phenomena
James Bogen
James Woodward
DSGE model
impulse-response function
JEL: 
B22
B23
B41
Document Type: 
Working Paper

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