Identifying the sources of the slowdown in growth: Demand vs. supply

Arbeitspapier

Long-run GDP growth has declined in the United States over the past two decades. Two competing views take the stage in accounting for this slowdown: demand-side and supply-side. I empirically quantify their relative importance in a Bayesian SVAR with common trends, identified using sign restrictions based on the co-movement of prices and quantities. While supply-side factors were the main driver of long-run GDP growth prior to 2000, demand-side factors explain half of its slowdown afterwards. The findings suggest a relevant role of demand forces as drivers of long-run growth.

Object Details

• ISBN: 978-82-8379-204-1
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 9/2021

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models ; Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
• Subject: Long-run growth ; Super-hysteresis ; SVAR

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Maffei-Faccioli, Nicolò
• Event: Veröffentlichung
• (who): Norges Bank
• (where): Oslo
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/246128
• Last update: 10.03.2025, 11:44 AM CET