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Growth and Business Cycles for the Swedish Economy 1963-1999

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  • Bharat Barot

    (National Institute of Economic Research, Stockholm, Sweden)

Abstract

This paper consists of two parts. In the first part we carry out a traditional growth accounting exercise for the private business sectors of the Swedish economy. We search for structural breaks during the sample period, using Chow tests, using a dynamic specification of Total Factor Productivity (TFP). In order to facilitate comparisons we compare the results of this study both with other Swedish and international studies. To a large extent we are able to replicate the results of this study with Swedish results. The slow down in TFP growth rates in the 1970s can be identified with the first and second oil shocks in 1973 and 1979. The other structural breaks in the 1990s can be identified with the Swedish Tax Reform (1991), The Granger causality test indicate that the growth rates in investment Granger cause growth rates in TFP for agriculture and financial institutions, real estate and other business, while TFP growth rates in mining and quarrying and manufacturing Granger cause growth rates in investment. The second part of the paper Hodrick-Prescott filter the data and calculate cross correlations of detrended output, hours, investment and TFP at different leads and lags. The results indicate that investment leads TFP for agriculture, hunting forestry and fishing, electricity gas and water, education health and social work. Investment lags TFP for the mining and quarrying and manufacturing companies. The decomposition of TFP into trend and cyclical component historically dates the Swedish business cycle.

Suggested Citation

  • Bharat Barot, 2004. "Growth and Business Cycles for the Swedish Economy 1963-1999," Macroeconomics 0409017, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpma:0409017
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    Keywords

    growth accounting; labour productivity; total factor productivity; growth dynamics; Hodrick-Prescott filtering; leads and lags; new economy;
    All these keywords.

    JEL classification:

    • E - Macroeconomics and Monetary Economics

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