Productivity and U.S. Macroeconomic Performance: Interpreting the Past and Predicting the Future with a Two-Sector Real Business Cycle Model

Peter Ireland and Scott Schuh

Review of Economic Dynamics, 2008, vol. 11, issue 3, 473-492

Abstract: A two-sector real business cycle model, estimated with postwar U.S. data, identifies shocks to the levels and growth rates of total factor productivity in distinct consumption- and investment-goods-producing technologies. This model attributes most of the productivity slowdown of the 1970s to the consumption-goods sector; it suggests that a slowdown in the investment-goods sector occurred later and was much less persistent. Against this broader backdrop, the model interprets the more recent episode of robust investment and investment-specific technological change during the 1990s largely as a catch-up in levels that is unlikely to persist or be repeated anytime soon. (Copyright: Elsevier)

Keywords: Productivity; Two-sector real business cycle model (search for similar items in EconPapers)
JEL-codes: E32 O41 O47 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (55)

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Related works:
Working Paper: Productivity and U.S. Macroeconomic Performance: Interpreting the Past and Predicting the Future with a Two-Sector Real Business Cycle Model (2007)
Working Paper: Productivity and U.S. Macroeconomic Performance: Interpreting the Past and Predicting the Future with a Two-Sector Real Business Cycle Model (2006)
Working Paper: Productivity and U.S. macroeconomic performance: interpreting the past and predicting the future with a two-sector real business cycle model (2006)
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DOI: 10.1016/j.red.2007.10.001

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