Asymmetric Cycles
I estimate a model in which new technology entails random adjustment costs. Rapid adjustments may cause productivity slowdowns. These slowdowns last longer when retooling is costly. The model explains why growth-rate disasters are more likely than miracles, and why volatility of growth relates negatively to growth over time. I estimate the model, and the estimates have surprising implications. Firms seem to abandon technologies long before they are perfected current-practice TFP is 17 percent below best-practice.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
10573.
| Length: | |
| Date of creation: | Jun 2004 |
| Date of revision: | |
| Publication status: | published as Jovanovic, Boyan. "Asymmetric Cycles," Review of Economic Studies, 2006, v73(1,Jan), 145-162. |
| Handle: | RePEc:nbr:nberwo:10573 |
| Note: | EFG PR |
| Contact details of provider: | Postal: Phone: 617-868-3900 Web page: http://www.nber.org Email: More information through EDIRC
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