Does the Solow Residual for Korea Reflect Pure Technology Shocks?
Hyunjoon Lim and
No 777, Econometric Society 2004 Far Eastern Meetings from Econometric Society
This study investigates the relationship between the measured Solow residual and demand side variables for the Korean economy. The measured Solow residuals are shown to be Granger-caused by some demand side variables such as exports, M1, and government expenditure. A vector error correction model is constructed to investigate dynamic relation between these demand side variables and the Solow residual. Impulse response functions shows that the measured Solow residual moves pro-cyclically with the demand shocks, and that the forecast error variance of the measured Solow residual is mostly explained by past innovations of these demand side variables
Keywords: Solow residual; Productivity shock; Vector error correction model (search for similar items in EconPapers)
JEL-codes: O47 E32 C32 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ecm:feam04:777
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