21,843 research outputs found

    Common Stochastic Trends, Common Cycles, and Asymmetry in Economic Fluctuations

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    We investigate the nature of asymmetries in U.S. business cycle dynamics using a dynamic two-factor model of output, investment, and consumption that incorporates both the common stochastic trend implied by neoclassical growth theory and a common transitory component. This framework allows for identification of both types of asymmetry commonly identified in the literature: 1. Shifts in the growth rate of the trend component and 2. Transitory deviations below trend, or "plucking". The model also lends itself easily to tests of the marginal significance of each type of asymmetry when the other is allowed to be present. Such tests suggest that both types of asymmetries have played a significant role in post-war recessions, although the nature of shifts in the growth rate of trend is different than the received literature suggests. We also allow for a one-time structural break in the long run growth rate of the common stochastic trend (a productivity slowdown) and in the magnitude of the asymmetry parameters. We find evidence of a productivity slowdown and an increase in the relative importance of shifts in the common stochastic trend vs. the "plucking" type of asymmetry. The evidence suggests a gradual structural break which begins in the mid 1960's and is complete by the end of 1973.

    Common stochastic trends, common cycles, and asymmetry in economic fluctuations

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    This paper investigates the nature of U.S. business cycle asymmetry using a dynamic factor model of output, investment, and consumption. We identify a common stochastic trend and common transitory component by embedding the permanent income hypothesis within a simple growth model. Markov-switching in each component captures two types of asymmetry: Shifts in the growth rate of the common stochastic trend, having permanent effects, and "plucking" deviations from the common stochastic trend, having only transitory effects. Statistical tests suggest both asymmetries were present in post-war recessions, although the shifts in trend are less severe than found in the received literature.Business cycles ; Recessions

    The Dynamic Relationship Between Permanent and Transitory Components of U.S. Business Cycle

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    This paper investigates the relationship between permanent and transitory components of U.S. recessions in an empirical model allowing for business cycle asymmetry. Using a common stochastic trend representation for real GDP and consumption, we divide real GDP into permanent and transitory components, the dynamics of which are different in booms vs. recessions. We find evidence of substantial asymmetries in postwar recessions, and that both the permanent and transitory component have contributed to these recessions. We also allow for the timing of switches from boom to recession for the permanent component to be correlated with switches from boom to recession in the transitory component. The parameter estimates suggest a specific pattern of recessions: switches in the permanent component lead switches in the transitory component both when entering and leaving recessions.

    Korean modernization and peasant mobilization in the 1960s and 1970s

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    In the contemporary world history, rural communities and small producers did not naturally disappear due to the loss of economic competitiveness, but were artificially constrained and destroyed by the state laws, institutions, and policies. South Korea, which is considered a representative success case of the late capitalist industrialization after the World War II, can be an important example to examine the relevance of this challenging perspective. Korea#S economic success was largely determined by the NACF (National Agricultural Cooperatives Federation) lack of integrity: it was to be a voluntary and autonomous organization of farmers, but became a subordinate partner of the agricultural policy of the military government. The Saemaul (New Country) Movement developed by the government to promote rural innovations actually accelerated the decline of agriculture for it was used to control farmers. In the 1960s and 1970s, the Korean rural society was deeply dependent on the state power. At the same time, the farmers resistance developed as a reaction to the military government policies, and the NACF became the target of the farmers collective resistance movement. Thus, under the Park Chung Hee#s regime, Korean farmers were to participate in the national economy and become a part of the mandatory social-economic movement; however, they never managed to achieve a true class/collective political representation
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