Understanding the Persistence Properties
نویسنده
چکیده
This paper evaluates the ability of a two-country model of growth and cycles to explain the persistence properties of output and consumption across countries. Simulated output and consumption levels replicate the observed appearance of non-cointegration across countries. Simulated output growth rates, however, do not explain the observed positive serial correlation of output growth rates. The reallocation of resources in response to technology shocks generates a negative serial correlation for output growth rates.
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