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Constant returns to scale is a central construct of neoclassical theory. Previous studies argued that one must adopt a specification of the production function with substantial unobserved service variation to reconcile constant returns with the data. Some economists have argued that this finding...
Persistent link: https://www.econbiz.de/10005427746
In the postwar period velocity has risen so sharply in the U.S. that the ratio of money to nominal output has fallen by a factor of three. We analyze the implications of shrinking money for the real effects of a monetary shock in two classes of equilibrium monetary business cycle models: limited...
Persistent link: https://www.econbiz.de/10005427777
Latin American countries are the only Western countries that are poor and that aren't gaining ground on the United States. This article evaluates why Latin America has not replicated Western economic success. We find that this failure is primarily due to total factor productivity (TFP)...
Persistent link: https://www.econbiz.de/10004993809
This paper presents a dynamic, stochastic general equilibrium study of the causes of the international Great Depression. We use a fully articulated model to assess the relative contributions of deflation/monetary shocks, which are the most commonly cited shocks for the Depression, and...
Persistent link: https://www.econbiz.de/10004993822
Latin American countries are the only Western countries that are poor and that aren't gaining ground on the United States. This paper evaluates why Latin America has not replicated Western economic success. We find that this failure is primarily due to TFP differences. Latin America's TFP gap is...
Persistent link: https://www.econbiz.de/10004993826
Detailed macroeconomic data to accompany the article in the Review of Economic Dynamics
Persistent link: https://www.econbiz.de/10005090723
The UK was depressed for 20 years between the two World Wars. The decrease in output was entirely due to lower hours per worker and lower employment. Our main finding is that generous unemployment benefits, in conjunction with large negative sectoral shocks, is the most plausible candidate...
Persistent link: https://www.econbiz.de/10005069702
Persistent link: https://www.econbiz.de/10005020975
Persistent link: https://www.econbiz.de/10005735037
The extent to which there are aggregate returns to scale at the level of aggregate production has important implications both for the types of shocks generating business cycles and for optimal policy. However, prior attempts to measure the extent of these returns using instrumental variable...
Persistent link: https://www.econbiz.de/10005707900