Tracking the slowdown in long-run GDP growth

Antolin-Diaz, Juan, Drechsel, Thomas and Petrella, Ivan (2016) Tracking the slowdown in long-run GDP growth. CFM discussion paper series (CFM-DP2016-04). Centre For Macroeconomics, London, UK.

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Abstract

Using a dynamic factor model that allows for changes in both the longrun growth rate of output and the volatility of business cycles, we document a significant decline in long-run output growth in the United States. Our evidence supports the view that most of this slowdown occurred prior to the Great Recession. We show how to use the model to decompose changes in long-run growth into its underlying drivers. At low frequencies, a decline in the growth rate of labor productivity appears to be behind the recent slowdown in GDP growth for both the US and other advanced economies. When applied to realtime data, the proposed model is capable of detecting shifts in long-run growth in a timely and reliable manner.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://www.centreformacroeconomics.ac.uk/Home.aspx
Additional Information:	© 2016 The Authors
Divisions:	Centre for Macroeconomics
Subjects:	H Social Sciences > HB Economic Theory
JEL classification:	C - Mathematical and Quantitative Methods > C3 - Econometric Methods: Multiple; Simultaneous Equation Models; Multiple Variables; Endogenous Regressors > C32 - Time-Series Models E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E23 - Production E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations; Cycles O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output (Income) Convergence
Date Deposited:	13 Dec 2017 10:47
Last Modified:	15 Sep 2023 23:40
URI:	http://eprints.lse.ac.uk/id/eprint/86243

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