Links
Comprehensive material on real business cycles (RBCs) [or dynamic general equilibrium (DGE) models, as they are often called these days] is found at Christian Zimmermann's
RBC & DGE site

A compact intro and links are provided at
Wikipedia

Alex Tabarrok sketches how Robi C generates RBCs while trapped on his island:
Crusoe RBC

Real business cycles
The breed of models ranging from the Keynesian cross to AD-AS focuses on the economy's demand side and sticky wages and/or prices as a source of income fluctuations. An alternative line of thinking emphasizes the supply side and describes business cycles without recourse to nominal stickyness. Since there is no role for norminal variables such as money, prices or wages in this model, the fluctuations it describes are called real business cycles. The resulting model is the real-business-cycle model.
    The real-business-cycle model makes use of tools known from microeconomics. It is thus said to possess microfoundations.
    This section's elearning material provides informal access to how real-business-cycle models work and how well they succeed.

This applet features a full-scale real-business-cycle model. You may look at impulse responses, that is, at how any macroeconomic variable responds to a one-time shock, transitory, persistent or permanent. In addition, macroeconomic time series can be simulated as they would result from an exposure to a series of shocks. One may then distill the comovements of pairs of variables and compare this with empirical comovements discovered for the country of your choice with our HP-filter applet offered in the eur macro data section.
[This is a preliminary version of the applet that we are still testing. Your feedback is very welcome!]

 
This applet emphasizes the optimizing decisions that drive the real-business-cycle model. Both current-period and intertemporal optimizing desions can be studied – in isolation, and with a view of how they interact. Finally, those decisions are condensed onto a macroeconomic diagram that lets users experience how various shocks trigger real business cycles.
[The graphical approach to real business cycles employed here is discussed in this background paper.]
This section provides a very much self-contained introduction to real business cycles. Blending the relevant interactive models and data applets available on this site with careful guidance and selected texts provides for a unique learning experience, spanning from the basic philosophy of the real-business-cycle approach via its theoretical underpinnings and design to its empirical implications and performance.
[This feature is not available yet]

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