{
  "title": "Output and Inflation Co-movement: An Update on Business-Cycle Stylized Facts",
  "publication": "IMF Working Papers, December 13, 2016",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/output-and-inflation-co-movement-an-update-on-business-cycle-stylized-facts-44459",
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  "summary": "What are the drivers of business cycle fluctuations? And how many are there? By documenting strong and predictable co-movement of real variables during the business cycle in a sample of advanced economies, we argue that most business cycle fluctuations are driven by one major factor.",
  "sections": [
    {
      "heading": "Authors and publication",
      "content": "- Authors: Michal Andrle, Jan Bruha, Serhat Solmaz\n- Publication date: December 13, 2016\n- Series: Working Paper No. 2016/241\n- Issue: 241\n- Volume: 2016\n- Pages: 37\n- DOI: https://doi.org/10.5089/9781475560329.001\n- Stock No: WPIEA2016241\n- ISBN: 9781475560329\n- ISSN: 1018-5941"
    },
    {
      "heading": "Core findings",
      "content": "- Most business cycle fluctuations are driven by one major factor, based on documentation of strong and predictable co-movement of real variables during the business cycle in a sample of advanced economies.\n- Real output and inflation co-move positively, which the authors interpret as convincing evidence for a demand story driving business cycles.\n- The recent vintage of structural economic models has difficulties replicating the stylized facts documented by the authors."
    },
    {
      "heading": "Contribution and proposed tools",
      "content": "- The paper proposes a simple statistic designed to compare data and models with respect to the documented co-movement patterns.\n- The statistic is used to show discrepancies between the stylized facts in the data and the behavior of contemporary structural models."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject areas: Business cycles, Econometric analysis, Econometric models, Economic growth, Financial services, Inflation, Inflation targeting, Monetary policy, Prices, Short term interest rates\n- Keywords: Business cycle; business cycle frequency; Business cycles; demand shock; demand shocks; DSGE models; dynamic principal components; Econometric models; Inflation; inflation cycle; inflation dynamics; inflation expectation; inflation gap; Inflation targeting; Short term interest rates; WP"
    },
    {
      "heading": "Availability and formats",
      "content": "- Format indicated on landing page: PDF available for download.\n- Citation example provided in Chicago format including an accessed date of 9/17/2026.\n\nIMF Working Paper No. 2016/241 — Michal Andrle, Jan Bruha, Serhat Solmaz\n\n---\n\n Content in this bundle\n\n- Output and Inflation Co-Movement: An Update on Business-Cycle Stylized Facts\n  - Output and Inflation Co-Movement: An Update on Business-Cycle Stylized Facts (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Output and Inflation Co-Movement: An Update on Business-Cycle Stylized Facts (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/output-and-inflation-co-movement-an-update-on-business-cycle-stylized-facts-44459"
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    "Authors: Michal Andrle, Jan Bruha, Serhat Solmaz",
    "Published: December 13, 2016",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781475560329.001",
    "Authors: Michal Andrle, Jan Bruha, Serhat Solmaz",
    "Publication date: December 13, 2016",
    "Series: Working Paper No. 2016/241",
    "Issue: 241",
    "Volume: 2016",
    "Pages: 37",
    "DOI: https://doi.org/10.5089/9781475560329.001",
    "Stock No: WPIEA2016241",
    "ISBN: 9781475560329",
    "ISSN: 1018-5941",
    "Most business cycle fluctuations are driven by one major factor, based on documentation of strong and predictable co-movement of real variables during the business cycle in a sample of advanced economies.",
    "Real output and inflation co-move positively, which the authors interpret as convincing evidence for a demand story driving business cycles.",
    "The recent vintage of structural economic models has difficulties replicating the stylized facts documented by the authors.",
    "The paper proposes a simple statistic designed to compare data and models with respect to the documented co-movement patterns.",
    "The statistic is used to show discrepancies between the stylized facts in the data and the behavior of contemporary structural models.",
    "Subject areas: Business cycles, Econometric analysis, Econometric models, Economic growth, Financial services, Inflation, Inflation targeting, Monetary policy, Prices, Short term interest rates",
    "Keywords: Business cycle; business cycle frequency; Business cycles; demand shock; demand shocks; DSGE models; dynamic principal components; Econometric models; Inflation; inflation cycle; inflation dynamics; inflation expectation; inflation gap; Inflation targeting; Short term interest rates; WP",
    "Format indicated on landing page: PDF available for download.",
    "Citation example provided in Chicago format including an accessed date of 9/17/2026.",
    "**Output and Inflation Co-Movement: An Update on Business-Cycle Stylized Facts**"
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