Real business cycle theory was introduced by
A) Milton Friedman and Robert Lucas.
B) Milton Friedman and Anna Schwartz.
C) Thomas Cooley and Gary Hansen.
D) Finn Kydland and Edward Prescott.
E) Robert Lucas.

Question

Quizplus · Accepted Answer

Real business cycle theory was introduced by Finn Kydland and Edward Prescott in the early 1980s. Robert Lucas was also a prominent contributor to the theory, but he did not introduce it alone. Milton Friedman and Anna Schwartz were known for their work on monetary history, rather than business cycles. Thomas Cooley and Gary Hansen contributed to the theory of incomplete markets, but not specifically to real business cycle theory.

Real Business Cycle Theory Was Introduced by