structure into the model (see, for example, Hornstein and Praschnik (1997), Horvath (2000), and Dupor (1999)). However, because input-output matrices are relatively sparse, intersectoral linkages do not seem to be strong enough to be a major source of comovement.
Other potential sources of comovement that deserve further exploration are costs to moving production factors across sectors (Boldrin, et al. (2001)) and sticky wages (DiCecio (2003)).
The comovement patterns illustrated in Figures 3 through 6 are likely to contain important clues about the shocks and mechanisms that generate business cycles. Exploring the comovement properties of business cycle models is an important, but under-researched topic in macroeconomics.
4. Conclusion
Methodological revolutions such as the one led by Kydland and Prescott (1982) are rare. They propose new methods, ask new questions, and open the door to exciting research. I was very lucky to have been one of many young researchers who had a chance to participate in the Kydland-Prescott research program and get a closer look at the mechanics of business cycles.
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