Medium-term Fluctuations and the 'Great Ratios' of Economic Growth
Publikation: Working paper › Forskning
Standard
Medium-term Fluctuations and the 'Great Ratios' of Economic Growth. / Groth, Christian; Madsen, Jakob Brøchner.
Kbh. : Økonomisk institut, Københavns Universitet, 2013.Publikation: Working paper › Forskning
Harvard
APA
Vancouver
Author
Bibtex
}
RIS
TY - UNPB
T1 - Medium-term Fluctuations and the 'Great Ratios' of Economic Growth
AU - Groth, Christian
AU - Madsen, Jakob Brøchner
N1 - JEL Classification: E3, G1, O4
PY - 2013
Y1 - 2013
N2 - Evidence for the OECD countries show that the “great ratios”, such as the unemployment rate, factor shares, Tobin’s q and the investment-capital ratio, fluctuate significantly on medium-term frequencies of 10-40 years duration. To explain these medium-term fluctuations, we establish a macro-dynamic model where the q-theory of investment is combined with sluggish real-wage adjustment in the labour market. In this framework, responses to shocks show persistence and amplification. A high degree of real-wage rigidity combined with a low elasticity of factor substitution leads to damped internal oscillations and hump-shaped impulse-response functions
AB - Evidence for the OECD countries show that the “great ratios”, such as the unemployment rate, factor shares, Tobin’s q and the investment-capital ratio, fluctuate significantly on medium-term frequencies of 10-40 years duration. To explain these medium-term fluctuations, we establish a macro-dynamic model where the q-theory of investment is combined with sluggish real-wage adjustment in the labour market. In this framework, responses to shocks show persistence and amplification. A high degree of real-wage rigidity combined with a low elasticity of factor substitution leads to damped internal oscillations and hump-shaped impulse-response functions
KW - Faculty of Social Sciences
KW - Medium-term cycles
KW - Tobin’s q
KW - real-wage Phillips curve
KW - elasticity of factor substitution
KW - endogenous oscillations
M3 - Working paper
T3 - University of Copenhagen. Institute of Economics. Discussion Papers (Online)
BT - Medium-term Fluctuations and the 'Great Ratios' of Economic Growth
PB - Økonomisk institut, Københavns Universitet
CY - Kbh.
ER -
ID: 98952992