The nation continues to recover from one of the worst recessions since the Great Depression. States were hit hard, incurred significant losses, and many are only just now showing signs of meaningful recovery. Whether it is efforts to bring investments in pre-K back to pre-recession levels or creating new investments, states have indicated, for the…

The authors review the graphical approach to teaching the real business cycle model introduced in Barro. They then look at where this approach cuts corners and suggest refinements. Finally, they compare graphical and exact models by means of impulse-response functions. The graphical models yield reliable qualitative results. Sizable quantitative…