Productivity Growth and the Trade Balance in the 1990s: the Role of Evolving Perceptions
This paper examines the importance of productivity shocks in accounting for salient features of U.S. economic developments during the second half of the 1990s, including the surge in investment spending, the substantial deterioration of the trade balance, and the modest decline in inflation. We calibrate a two-country dynamic general equilibrium model and show that agents' perceptions regarding the permanence of the shocks that occurred in the late 1990s are crucial in accounting for these developments. Within a signal extraction framework, we attempt to match survey data on long-term projected output growth. Our calibrated model can account for about two-thirds of the rise in the investment share of output, and over half of the deterioration in the trade balance over this period
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||2004|
|Date of revision:|
|Contact details of provider:|| Postal: Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA|
Web page: http://www.EconomicDynamics.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:red:sed004:719. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann)
If references are entirely missing, you can add them using this form.