Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7368160 | Journal of Monetary Economics | 2018 | 33 Pages |
Abstract
The Great Recession, the Great Depression, and the Japanese Slump of the 1990s were all preceded by periods of major technological innovation, which happened about 10 years before the start of the decline in economic activity. We estimate a model with noisy news. We find that beliefs about long-run income adjust to permanent shifts in productivity with an important delay. The estimation tells a common and simple story for the observed dynamics of productivity and consumption on a 20 to 25 year window. Our analysis highlights the advantages of a look at this data from the point of view of the medium run.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Dan Cao, Jean-Paul L'Huillier,