Robert Hall is the chair of the NBER business-cycle dating committee. He has been one of the leading scholars of cyclical fluctuations for nearly 50 years.
Questions for analysis
In Figure 1, why does Hall include purchases of consumer durables with investment rather than consumption? Does this seem like a good idea?
What does Hall mean by "financial frictions"? Why are they important in a financial crisis?
Why might the markup ratio be countercyclical?
Describe the elements of Hall's "static model" of Figure 3 in language that your non-economist grandmother could understand. Which pieces of his model are familiar from our class models and which are new?
From what you know of the financial crisis, to what extent does Hall's analysis seem to fit the quantitative and qualitative history?