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Does technology cause business cycles in the USA? A Schumpeter-inspired approach

Konstantakis, Konstantinos N. and Michaelides, Panayotis G. (2017) Does technology cause business cycles in the USA? A Schumpeter-inspired approach. Structural Change and Economic Dynamics, 43. pp. 15-26. ISSN 0954-349X

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Identification Number: 10.1016/j.strueco.2017.05.005

Abstract

The purpose of this paper is to deal with questions of instability and economic crisis, deriving theoretical arguments from Schumpeter’s works and presenting relevant empirical evidence for the case of the US manufacturing sector in the time period 1958-2006, just before the first signs of the global recession made their appearance. More precisely, we use a wide dataset that contains 473 manufacturing industries, that are clustered based on their annual change of hourly earnings per worker and we make an attempt to interpret the economic fluctuations in the clusters formed. Meanwhile, we study the causal relationships between the crucial variables dictated by Schumpeterian theory. In this context, a number of relevant techniques have been used, such as hierarchical clustering, canonical discriminant analysis, cointegration analysis, periodograms and Granger causality tests. Our findings seem to give credit to certain aspects of the Schumpeterian theory of business cycles. The results are discussed in a broader context, related to the US economy.

Item Type: Article
Official URL: https://www.journals.elsevier.com/structural-chang...
Additional Information: © 2017 Elsevier B.V.
Divisions: Systemic Risk Centre
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management
Sets: Research centres and groups > Systemic Risk Centre
Date Deposited: 09 Jun 2017 13:36
Last Modified: 20 Mar 2019 03:15
URI: http://eprints.lse.ac.uk/id/eprint/80760

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