This paper investigates the sources of business cycle fluctuations, focusing on the assumption that only supply shocks, such as technological advancements, oil price changes, and labor supply adjustments, affect output in the long run. Real and monetary aggregate demand shocks, on the other hand, influence output only in the short run. The authors use this assumption to estimate the impact of these shocks on output and prices at various frequencies. They find that aggregate demand shocks account for about 20-30% of output fluctuations at business cycle frequencies, technological shocks contribute about one-quarter of cyclical fluctuations, and oil price shocks are significant in explaining episodes in the 1970s and 1980s. Additionally, shocks that permanently affect labor input account for about half of the variance in output fluctuations at all frequencies. The paper also discusses the methodology and data analysis, including unit root tests and the role of exogenous oil price changes. The results highlight the importance of permanent labor supply shifts in output variability at all frequencies.This paper investigates the sources of business cycle fluctuations, focusing on the assumption that only supply shocks, such as technological advancements, oil price changes, and labor supply adjustments, affect output in the long run. Real and monetary aggregate demand shocks, on the other hand, influence output only in the short run. The authors use this assumption to estimate the impact of these shocks on output and prices at various frequencies. They find that aggregate demand shocks account for about 20-30% of output fluctuations at business cycle frequencies, technological shocks contribute about one-quarter of cyclical fluctuations, and oil price shocks are significant in explaining episodes in the 1970s and 1980s. Additionally, shocks that permanently affect labor input account for about half of the variance in output fluctuations at all frequencies. The paper also discusses the methodology and data analysis, including unit root tests and the role of exogenous oil price changes. The results highlight the importance of permanent labor supply shifts in output variability at all frequencies.