DP1642 Business Cycles and Long-run Growth
| Author(s): | Gilles Saint-Paul |
| Publication Date: | May 1997 |
| Keyword(s): | Busniess Cycles, Endogenous Growth, Labour Hoarding, Long-run Growth, Productivity, Restructuring |
| JEL(s): | E32, O3, O4 |
| Programme Areas: | International Macroeconomics |
| Link to this Page: | cepr.org/active/publications/discussion_papers/dp.php?dpno=1642 |
This survey discusses the effect of macroeconomic fluctuations on long-run growth from both a theoretical and empirical perspective. It emphasizes the ?opportunity cost? approach, which states that firms will intertemporally substitute productivity-enhancing activities for regular production activity during recessions. It provides aggregate evidence in favour of the opportunity cost approach.