Learning and shifts in long-run productivity growth

An extensive literature has analyzed the macroeconomic effects of shocks to the level of aggregate productivity; however, there has been little corresponding research on sustained shifts in the growth rate of productivity. In this paper, we examine the effects of shocks to productivity growth in a d...

Full description

Saved in:
Bibliographic Details
Published in:Journal of monetary economics 2007-11, Vol.54 (8), p.2421-2438
Main Authors: Edge, Rochelle M., Laubach, Thomas, Williams, John C.
Format: Article
Language:English
Subjects:
DGE models
Dynamic models
Economic models
Economic shock
Forecasts
General economic equilibrium
Growth rate
Growth rates
Kalman filter
Kalman filters
Macroeconomics
Productivity
Productivity shocks
Real-time data
Studies
U.S.A
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:An extensive literature has analyzed the macroeconomic effects of shocks to the level of aggregate productivity; however, there has been little corresponding research on sustained shifts in the growth rate of productivity. In this paper, we examine the effects of shocks to productivity growth in a dynamic general equilibrium model where agents do not directly observe whether shocks are transitory or persistent. We show that an estimated Kalman filter model using real-time data describes economists’ long-run productivity growth forecasts in the United States extremely well and that filtering has profound implications for the macroeconomic effects of shifts in productivity growth.
ISSN:0304-3932
1873-1295
DOI:10.1016/j.jmoneco.2007.01.003