Medium-term Fluctuations and the 'Great Ratios' of Economic Growth
Publikation: Working paper › Forskning
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
Originalsprog | Engelsk |
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Udgivelsessted | Kbh. |
Udgiver | Økonomisk institut, Københavns Universitet |
Antal sider | 47 |
Status | Udgivet - 2013 |
Navn | University of Copenhagen. Institute of Economics. Discussion Papers (Online) |
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Nummer | 16 |
Vol/bind | 2013 |
ISSN | 1601-2461 |
Bibliografisk note
JEL Classification: E3, G1, O4
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ID: 98952992