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Explaining U.S. economic growth performance by macroeconomic governance, 1952–2018

Author

Listed:
  • Taner Akan

    (Istanbul University)

  • Aycan Hepsağ

    (Istanbul University)

  • Şeref Bozoklu

    (Istanbul University
    North Carolina State University)

Abstract

This paper hypothesizes that the structure of macroeconomic governance with its financial and non-financial dynamics is, among other things, a key determinant of economic performance, taking the case of the United States from 1952Q1 to 2018Q4. The paper tests its hypothesis by developing three modes of macroeconomic governance based on complementarities and a time-series model to be used for the empirical analysis of these modes and by using a linear and nonlinear Autoregressive Distributed Lag cointegration model. In so doing, the paper compares five periods between 1952Q1 and 2018Q4 using the same time-series model to illustrate how the changing structure of macroeconomic governance affects long-term economic performance over time. The paper reaches three conclusions. First, higher economic performance in 1952Q1–1968Q3 originates in, among other things, a systemic mode of macroeconomic governance. Second, lower economic performance in the three sub-periods between 1968Q4 and 2008Q2 is due to a fragmented mode of macroeconomic governance. Third, the sharp decline in economic performance in 2008Q3–2018Q4 originates in the outbreak and deepening of a structural trap due to long-run structural fragmentation.

Suggested Citation

  • Taner Akan & Aycan Hepsağ & Şeref Bozoklu, 2022. "Explaining U.S. economic growth performance by macroeconomic governance, 1952–2018," Journal of Evolutionary Economics, Springer, vol. 32(5), pages 1437-1465, November.
    • Handle: RePEc:spr:joevec:v:32:y:2022:i:5:d:10.1007_s00191-022-00800-8
    DOI: 10.1007/s00191-022-00800-8
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    References listed on IDEAS

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    More about this item

    Keywords

    Complementarity; Growth; Macroeconomic governance;
    All these keywords.

    JEL classification:

    • E14 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Austrian; Evolutionary; Institutional
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical

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