Tracking the new economy
Subtitle: using growth theory to detect changes in trend productivity
By: James A. Kahn and Robert Rich.
Contributors: Rich, Robert  W., 1958-; Federal Reserve Bank of New York.
Series: Staff reports ;; no. 159; Staff reports (Federal Reserve Bank of New York : Online) ;; no. 159.
Publisher: Federal Reserve Bank of New York
Published: 2003
Place of publication: [New York, N.Y.]
Language: eng
Format: Electronic resource
Subjects: Industrial productivity.; Economic development.
Description: "The acceleration of productivity since 1995 has prompted a debate over whether the economy's underlying growth rate will remain high.  In this paper, we propose a methodology for estimating trend growth that draws on growth theory to identify variables other than productivity--namely consumption and labor compensation--to help estimate trend productivity growth.  We treat that trend as a common factor with two "regimes" high-growth and low-growth.  Our analysis picks up striking evidence of a switch in the mid-1990s to a higher long-term growth regime, as well as a switch in the early 1970s in the other direction.  In addition, we find that productivity data alone provide insufficient evidence of regime changes; corroborating evidence from other data is crucial in identifying changes in trend growth.  We also argue that our methodology would be effective in detecting changes in trend in real time: In the case of the 1990s, the methodology would have detected the regime switch within two years of its actual occurrence according to subsequent data"--Federal Reserve Bank of New York web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 3/2/2005.
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Mode of access: World Wide Web.