What drives endogenous growth in the United States?
The cleansing effects of recessions are investigated. We estimate a DSGE model allowing for endogenous growth to be driven by two competing theories. Either learning-by-doing effects or cleansing effects of recessions drive endogenous growth. Using Bayesian estimation techniques we find that reallocation effects in recessions dominate and also non-technological innovations have effects on productivity and, hence, long-run growth. Furthermore, we show that using directly observable TFP in the estimation has sizable effects on parameter estimates, the identification of shocks, and model dynamics.
Year of publication: |
2015
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Authors: | Dennis, Wesselbaum |
Published in: |
The B.E. Journal of Macroeconomics. - De Gruyter, ISSN 1935-1690. - Vol. 15.2015, 1, p. 39-39
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Publisher: |
De Gruyter |
Saved in:
Online Resource
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