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- Title
What drives endogenous growth in the United States?
- Authors
Wesselbaum, Dennis
- Abstract
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.
- Subjects
UNITED States; ENDOGENOUS growth (Economics); UNITED States economy, 2009-2017; BAYESIAN analysis; ECONOMIC equilibrium; ECONOMIC development; PRODUCTION (Economic theory)
- Publication
B.E. Journal of Macroeconomics, 2015, Vol 15, Issue 1, p183
- ISSN
2194-6116
- Publication type
Article
- DOI
10.1515/bejm-2013-0179