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Slowdowns and Meltdowns: Postwar Growth Evidence from 74 Countries

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Author Info
Dan Ben-David
David H. Papell

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Abstract

This paper proposes an explicit test for determining the significance and the timing of" slowdowns in economic growth during the postwar period. We examine a large sample of" countries (both industrialized and developing), and find that a majority though not all " exhibit a significant structural break in their postwar growth rates. In nearly all of these cases the break was followed by a growth slowdown. The breaks fall into two primary periods" which delineate countries by developmental and regional characteristics as well as by the" magnitude of the subsequent slowdowns. We find that (a) most industrialized countries" experienced postwar growth slowdowns in the early 1970s, though (b) the United States Canada and the United Kingdom did not, and (c) developing countries (and in particular American countries) tended to experience much more severe slowdowns which with the more developed countries, began nearly a decade later.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6266.

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Date of creation: Nov 1997
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Publication status: published as Review of Economics and Statistics, vol 80, November 1998, pp. 561-71
Handle: RePEc:nbr:nberwo:6266

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C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models
O1 - Economic Development, Technological Change, and Growth - - Economic Development

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  1. Ben-David, Dan, 1994. "Convergence Clubs and Diverging Economies," CEPR Discussion Papers 922, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. Bruno, Michael, 1984. "Raw Materials, Profits, and the Productivity Slowdown," The Quarterly Journal of Economics, MIT Press, vol. 99(1), pages 1-29, February. [Downloadable!] (restricted)
  3. Andrews, Donald W K & Ploberger, Werner, 1994. "Optimal Tests When a Nuisance Parameter Is Present Only under the Alternative," Econometrica, Econometric Society, vol. 62(6), pages 1383-1414, November. [Downloadable!] (restricted)
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  4. Fischer, Stanley, 1988. "Symposium on the Slowdown in Productivity Growth," Journal of Economic Perspectives, American Economic Association, vol. 2(4), pages 3-7, Fall. [Downloadable!] (restricted)
  5. John Y. Campbell & Pierre Perron, 1991. "Pitfalls and Opportunities: What Macroeconomists Should Know About Unit Roots," NBER Technical Working Papers 0100, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Azariadis, Costas & Drazen, Allan, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 501-26, May. [Downloadable!] (restricted)
  7. Eric Zivot & Donald W.K. Andrews, 1990. "Further Evidence on the Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Cowles Foundation Discussion Papers 944, Cowles Foundation, Yale University. [Downloadable!]
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  8. Perron, P., 1994. "Further Evidence on Breaking Trend Functions in Macroeconomic Variables," Cahiers de recherche 9421, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
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  9. Ben-David, D. & Papell, D.H., 1995. "The Great War, The Great Crash and Steady State Growth: Some New Evidence an Old Stylized Fact," Papers 36-95, Tel Aviv - the Sackler Institute of Economic Studies.
  10. Kumiharu Shigehara, 1992. "Causes of declining growth in industrialized countries," Proceedings, Federal Reserve Bank of Kansas City, pages 15-39.
  11. Nordhaus, William D., 1982. "Economic policy in the face of declining productivity growth," European Economic Review, Elsevier, vol. 18(1), pages 131-157. [Downloadable!] (restricted)
  12. Coe, David T & Helpman, Elhanan & Hoffmaister, Alexander W, 1997. "North-South R&D Spillovers," Economic Journal, Royal Economic Society, vol. 107(440), pages 134-49, January. [Downloadable!] (restricted)
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  13. Nordhaus, William D., 1982. "Economic policy in the face of declining productivity growth," European Economic Review, Elsevier, vol. 18(2), pages 131-157. [Downloadable!] (restricted)
  14. Quah, Danny, 1993. "Empirical cross-section dynamics in economic growth," European Economic Review, Elsevier, vol. 37(2-3), pages 426-434, April. [Downloadable!] (restricted)
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  15. Ben-David, Dan & Papell, David H., 1995. "The great wars, the great crash, and steady state growth: Some new evidence about an old stylized fact," Journal of Monetary Economics, Elsevier, vol. 36(3), pages 453-475, December. [Downloadable!] (restricted)
  16. Andrews, Donald W K, 1993. "Tests for Parameter Instability and Structural Change with Unknown Change Point," Econometrica, Econometric Society, vol. 61(4), pages 821-56, July. [Downloadable!] (restricted)
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