Abstract
This paper examines the relationship between long-run growth and business cycles in the Organization for Economic Co-operation and Development (OECD). The model in the paper specifically assumes that the business cycle influences growth through total factor productivity. Using unconditional volatility to measure the business cycle, this paper finds a negative relationship between the business cycle and long-run growth even after controlling for endogeneity. The result is robust to the inclusion of either period or country dummy variables, but not both. Therefore, the result is somewhat fragile. Finally, the assumption of constant returns to scale is consistent with the data.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
