Learning-by-Doing as a Propagation Mechanism
46 Pages Posted: 27 Jul 2001
Date Written: June 2001
This paper suggests that skill accumulation through past work experience, or "learning-by-doing", can provide an important propagation mechanism for initial shocks, as the current labor supply affects future productivity. Our econometric analysis uses a Bayesian approach to combine micro-level panel data with aggregate time series. Formal model evaluation shows that the introduction of the LBD mechanism improves the model's ability to fit the dynamics of aggregate output and hours.
Keywords: Business-Cycle Fluctuations, Econometric Model Evaluation, Learning-by-Doing, Propagation of Shocks
JEL Classification: C52, E32, J22
Suggested Citation: Suggested Citation