A two-sector approach to modeling U.S. NIPA data

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Title: A two-sector approach to modeling U.S. NIPA data
Authors: Whelan, Karl
Permanent link: http://hdl.handle.net/10197/203
Date: Aug-2003
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
Copyright (published version): Copyright 2003 by The Ohio State University
Keywords: Capital stock;Economic development;Economic models;Investments
Subject LCSH: Economic development--Mathematical models
Capital stock--United States
United States--Economic conditions
Language: en
Status of Item: Peer reviewed
Appears in Collections:Economics Research Collection

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