Technological revolutions and the Three Great Slumps: A medium-run analysis

Dan Cao and L’Huillier, Jean-Paul
Authors registered in the RePEc Author Service: Jean-Paul L'Huillier

Journal of Monetary Economics, 2018, vol. 96, issue C, 93-108

Abstract: The Great Recession, the Great Depression, and the Japanese Slump of the 1990s were all preceded by periods of major technological innovation, which happened about 10 years before the start of the decline in economic activity. We estimate a model with noisy news. We find that beliefs about long-run income adjust to permanent shifts in productivity with an important delay. The estimation tells a common and simple story for the observed dynamics of productivity and consumption on a 20 to 25 year window. Our analysis highlights the advantages of a look at this data from the point of view of the medium run.

Keywords: Aggregate productivity; Permanent income; Learning; Secular stagnation; Financial crises (search for similar items in EconPapers)
JEL-codes: E21 E27 E32 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:96:y:2018:i:c:p:93-108

DOI: 10.1016/j.jmoneco.2018.04.003

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