Tracking the slowdown in long-run GDP growth

Juan Antolin-Diaz, Thomas Drechsel and Ivan Petrella

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Using a dynamic factor model that allows for changes in both the long-run growth rate of output and the volatility of business cycles, we document a significant decline in long-run output growth in the United States. Our evidence supports the view that most of this slowdown occurred prior to the Great Recession. We show how to use the model to decompose changes in long-run growth into its underlying drivers. At low frequencies, a decline in the growth rate of labor productivity appears to be behind the recent slowdown in GDP growth for both the United States and other advanced economies. When applied to real-time data, the proposed model is capable of detecting shifts in long-run growth in a timely and reliable manner.

JEL-codes: J1 N0 (search for similar items in EconPapers)
Date: 2017-05
New Economics Papers: this item is included in nep-gro, nep-his and nep-mac
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Citations: View citations in EconPapers (83)

Published in Review of Economics and Statistics, May, 2017, 99(2), pp. 343-356. ISSN: 0034-6535

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http://eprints.lse.ac.uk/81869/ Open access version. (application/pdf)

Related works:
Journal Article: Tracking the Slowdown in Long-Run GDP Growth (2017)
Working Paper: Tracking the slowdown in long-run GDP growth (2016)
Working Paper: Tracking the Slowdown in Long-Run GDP Growth (2016)
Working Paper: Tracking the slowdown in long-run GDP growth (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:81869

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