Has the American Output Growth Path Experienced a Permanent Change?

Thomas Lustenberger

Issue
2018-14

Pages
34

JEL classification
E32, E47

Keywords
Output growth, business cycle, permanent and transitory components

Year
2018

In this paper, I derive and apply three univariate methods and one bi-variate method to estimate permanent and transitory components of the American output growth path during the 1790 to 2017 period. The results show that statistical tests give little support to the hypothesis of significant permanent growth rate changes (univariate methods). The "special century" (1870-1970, as defined by Gordon (2016)) exhibited more volatile permanent shifts in the output level compared to recent decades (bivariate method).