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Deciphering the causes for the post-1990 slow output recoveries

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  • Zhang, Wen

Abstract

This paper explores the causes for the slow output recoveries in the U.S. since 1990, via estimating a time-varying parameter vector autoregressive model with stochastic volatilities. The model incorporates routine employment as a share of total employment and two financial variables, to simultaneously evaluate the roles of labor-market-related and credit-related factors in determining output dynamics. Based on the estimated model, the counterfactual experiments highlight the crucial roles of routine biased technological changes and structural changes that shift investment dynamics in explaining post-1990 slow output recoveries.

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  • Zhang, Wen, 2019. "Deciphering the causes for the post-1990 slow output recoveries," Economics Letters, Elsevier, vol. 176(C), pages 28-34.
    • Handle: RePEc:eee:ecolet:v:176:y:2019:i:c:p:28-34
    DOI: 10.1016/j.econlet.2018.12.003
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    More about this item

    Keywords

    Time-varying parameter VAR; Slow recoveries; Routine biased technological shock; Structural changes; Financial shocks;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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