Are long-run output growth rates falling?

Mengheng Li and Ivan Mendieta-Muñoz ()
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Ivan Mendieta-Muñoz: Department of Economics, University of Utah, USA
Authors registered in the RePEc Author Service: Ivan Mendieta-Muñoz

No 2019.07, Working Papers from International Network for Economic Research - INFER

Abstract: Abstract This paper studies the evolution of long-run growth rates in the G-7 countries. We identify a measure of long-run output growth rate with that rate of growth consistent with a constant unemployment rate. The methodology proposed also allows the derivation of the long-run growth rate associated with technical progress by separating the effects derived from movements in the rate of growth of the labour force. To measure its trajectories during the postwar period, we use time-varying parameter models that incorporate both stochastic volatility and a Heckman-type two-step estimation procedure that deals with the possible endogeneity problem in the econometric models. Our results show a significant decline in long-run growth rates that is not associated with the detrimental effects of the Great Recession, and that the rate of growth of technical progress appears to be behind the slowdown in long-run GDP growth. JEL Classification: O41, O47, C15, C32.

Keywords: Secular stagnation; long-run output growth rates; long-run technical progress growth rates; time-varying parameter models with stochastic volatility; Heckman two-step bias correction; Secular stagnation; long-run output growth rates; long-run technical progress growth rates; time-varying parameter models with stochastic volatility; Heckman two-step bias correction (search for similar items in EconPapers)
JEL-codes: C O (search for similar items in EconPapers)
Pages: 41 pages
Date: 2019
New Economics Papers: this item is included in nep-eec, nep-gro and nep-ore
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Related works:
Journal Article: Are long‐run output growth rates falling? (2020)
Working Paper: Are long-run output growth rates falling? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:inf:wpaper:2019.07

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