The U.S. Productivity Slowdown: A Peak through the Structural Break Window

Jim Dolmas, Baldev Raj and Daniel Slottje

Economic Inquiry, 1999, vol. 37, issue 2, 226-41

Abstract: This paper provides a formal test of the null hypothesis of a unit root in the log-level of labor productivity against the alternative of linear trend stationarity with a one-time structural break in the level and slope of the trend at an a priori unknown date. Using some newly developed time series tests, the authors show that the log-level of productivity is more accurately modeled as following a deterministic trend with a regime shift rather than as a unit root process. Some implications of the results for detrending and for testing cointegration relationships between productivity and other variables are discussed. Copyright 1999 by Oxford University Press.

Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ecinqu:v:37:y:1999:i:2:p:226-41

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