Asymmetric Cycles
27 Pages Posted: 4 Jul 2004 Last revised: 23 Nov 2022
Date Written: June 2004
Abstract
I estimate a model in which new technology entails random adjustment costs. Rapid adjustments may cause productivity slowdowns. These slowdowns last longer when retooling is costly. The model explains why growth-rate disasters are more likely than miracles, and why volatility of growth relates negatively to growth over time. I estimate the model, and the estimates have surprising implications. Firms seem to abandon technologies long before they are perfected current-practice TFP is 17 percent below best-practice.
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Boom-Bust Cycles in Middle Income Countries: Facts and Explanation
By Aaron Tornell and Frank Westermann
-
Boom-Bust Cycles in Middle Income Countries: Facts and Explanation
By Aaron Tornell and Frank Westermann
-
By Romain G. Rancière, Aaron Tornell, ...
-
By Romain G. Rancière, Aaron Tornell, ...
-
The Credit Channel in Middle Income Countries
By Aaron Tornell and Frank Westermann
-
Volatility, Growth and Aggregation
By Jean M. Imbs
-
By Jean M. Imbs
-
Crises and Growth: A Re-Evaluation
By Romain G. Rancière, Aaron Tornell, ...
-
Crises and Growth: A Re-Evaluation
By Romain G. Rancière, Aaron Tornell, ...
-
Crises and Growth: A Re-Evaluation
By Romain G. Rancière, Aaron Tornell, ...