The effects of business cycles on growth

This paper explores the links between business cycles and long-run growth. Although it is clear from a theoretical point of view that both of these phenomena are driven by the same macroeconomic variables, the interaction between economic fluctuations and growth has been largely ignored in the acad...

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Autor principal:	Fatás, Antonio
Formato:	Artículo
Lenguaje:	eng
Publicado:	Banco Central de Chile 2019
Materias:	CICLOS ECONÓMICOS DESARROLLO ECONÓMICO MACROECONOMÍA
Acceso en línea:	https://hdl.handle.net/20.500.12580/3685
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spelling	oai-20.500.12580-36852021-04-24T10:33:43Z The effects of business cycles on growth Fatás, Antonio CICLOS ECONÓMICOS DESARROLLO ECONÓMICO MACROECONOMÍA This paper explores the links between business cycles and long-run growth. Although it is clear from a theoretical point of view that both of these phenomena are driven by the same macroeconomic variables, the interaction between economic fluctuations and growth has been largely ignored in the academic literature. The main reason for this lack of attention is the surprising stability of long-term growth rates and their apparent independence from business cycle conditions, at least among industrial economies. Business cycles in these countries can be characterized as alternating series of recessions followed by recoveries that bring gross domestic product (GDP) levels to trend, this suggests that one can study growth and business cycles independently. To illustrate this point, figure 1 displays real GDP per capita for the U.S. economy during the period 1870–1999. A simple log-linear trend represents a highly accurate description of the long-term patterns of per capita output in the United States. This pattern is very similar for other industrial countries such as France, Germany, and Great Britain, although the slope of the trend shows stronger indications of breaks, especially after the Second World War. 2019-11-01T00:01:12Z 2019-11-01T00:01:12Z 2002 Artículo 956-7421-137 https://hdl.handle.net/20.500.12580/3685 eng Series on Central Banking, Analysis, and Economic Policies, no. 6 Attribution-NonCommercial-NoDerivs 3.0 Chile http://creativecommons.org/licenses/by-nc-nd/3.0/cl/ .pdf Sección o Parte de un Documento p. 191-219 application/pdf Banco Central de Chile
institution	Banco Mundial
collection	Banco Mundial
language	eng
topic	CICLOS ECONÓMICOS DESARROLLO ECONÓMICO MACROECONOMÍA
spellingShingle	CICLOS ECONÓMICOS DESARROLLO ECONÓMICO MACROECONOMÍA Fatás, Antonio The effects of business cycles on growth
description	This paper explores the links between business cycles and long-run growth. Although it is clear from a theoretical point of view that both of these phenomena are driven by the same macroeconomic variables, the interaction between economic fluctuations and growth has been largely ignored in the academic literature. The main reason for this lack of attention is the surprising stability of long-term growth rates and their apparent independence from business cycle conditions, at least among industrial economies. Business cycles in these countries can be characterized as alternating series of recessions followed by recoveries that bring gross domestic product (GDP) levels to trend, this suggests that one can study growth and business cycles independently. To illustrate this point, figure 1 displays real GDP per capita for the U.S. economy during the period 1870–1999. A simple log-linear trend represents a highly accurate description of the long-term patterns of per capita output in the United States. This pattern is very similar for other industrial countries such as France, Germany, and Great Britain, although the slope of the trend shows stronger indications of breaks, especially after the Second World War.
format	Artículo
author	Fatás, Antonio
author_facet	Fatás, Antonio
author_sort	Fatás, Antonio
title	The effects of business cycles on growth
title_short	The effects of business cycles on growth
title_full	The effects of business cycles on growth
title_fullStr	The effects of business cycles on growth
title_full_unstemmed	The effects of business cycles on growth
title_sort	effects of business cycles on growth
publisher	Banco Central de Chile
publishDate	2019
url	https://hdl.handle.net/20.500.12580/3685
work_keys_str_mv	AT fatasantonio theeffectsofbusinesscyclesongrowth AT fatasantonio effectsofbusinesscyclesongrowth
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The effects of business cycles on growth

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