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A two-sector approach to modeling U.S. NIPA data
Author(s)
Date Issued
2003-08
Date Available
2008-06-05T16:32:39Z
Abstract
The one-sector Solow-Ramsey model is the most popular model of long-run economic growth. This paper argues that a two-sector approach, in which technological progress in the production of durable goods exceeds that in the rest of the economy, provides a far better picture of the long-run behavior of the U.S. economy. The paper shows how to use the two-sector approach to model the real chain-aggregated variables currently featured in the U.S. National Income and Product Accounts. It is shown that each of the major chain-aggregates-output, consumption, investment, and capital stock-will tend in the long run to grow at steady, but different, rates. Implications for empirical analysis based on these data are explored.
Type of Material
Journal Article
Publisher
Blackwell Publishing on behalf of the Ohio State University
Journal
Journal of Money, Credit and Banking
Volume
35
Issue
4
Start Page
627
End Page
656
Copyright (Published Version)
Copyright 2003 by The Ohio State University
Subject – LCSH
Economic development--Mathematical models
Capital stock--United States
United States--Economic conditions
Web versions
Language
English
Status of Item
Peer reviewed
ISSN
0022-2879
This item is made available under a Creative Commons License
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