Learning by Doing and Aggregate Fluctuations

39 Pages Posted: 17 Jun 1999 Last revised: 9 May 2000

See all articles by Russell Cooper

Russell Cooper

University of Texas at Austin - Department of Economics; National Bureau of Economic Research (NBER)

Alok Johri

McMaster University - Department of Economics

Date Written: January 1999

Abstract

A major unresolved issue in business cycle theory is the construction of an endogenous propagation mechanism capable of capturing the amount of persistence displayed in the data. In this paper we explore the quantitative implications of one propagation mechanism: learning by doing. Estimation of the parameters characterizing learning by doing is based both on aggregate 2-digit data and plant level observations in the US. The estimated learning by doing function is then integrated into a stochastic growth model in which fluctuations are driven by technology shocks. We conclude that learning by doing can be a powerful mechanism for generating endogenous persistence.

Suggested Citation

Cooper, Russell W. and Johri, Alok, Learning by Doing and Aggregate Fluctuations (January 1999). NBER Working Paper No. w6898. Available at SSRN: https://ssrn.com/abstract=147368

Russell W. Cooper (Contact Author)

University of Texas at Austin - Department of Economics ( email )

Austin, TX 78712
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Alok Johri

McMaster University - Department of Economics ( email )

1280 Main Street West
Hamilton, Ontario L8S 4M4
Canada

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