Discussion paper

DP4915 Trends in Hours, Balanced Growth and the Role of Technology in the Business Cycle

The present paper revisits a property embedded in most dynamic macroeconomic models: the stationarity of hours worked. First, I argue that, contrary to what is often believed, there are many reasons why hours could be non-stationary in those models, while preserving the property of balanced growth. Second, I show that the post-war evidence for most industrialized economies is clearly at odds with the assumption of stationary hours per capita. Third, I examine the implications of that evidence for the role of technology as a source of economic fluctuations in the G7 countries.

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Citation

Galí, J (2005), ‘DP4915 Trends in Hours, Balanced Growth and the Role of Technology in the Business Cycle‘, CEPR Discussion Paper No. 4915. CEPR Press, Paris & London. https://cepr.org/publications/dp4915