The paper considers optimal monetary stabilization policy in a forward-looking model, when the central bank recognizes that private sector expectations need not be precisely model-consistent, and wishes to choose a policy that will be as good as possible in the case of any beliefs that are close...

The paper combines Baumol's model of structural change with a model of aggregate demand growth in the Keynesian-Kaleckian tradition to predict the dynamics of aggregate employment. The model for the demand regime is estimated with - and Baumol's model for the productivity regime is calibrated on...

Since the early 1990s, as the United States has borrowed from the rest of the world, employment in U.S. goods-producing sectors has fallen. Using a dynamic general equilibrium model, we find that rapid productivity growth in goods production, not U.S. borrowing, has been the most important...

The paper provides an explanation for the secular increase in the price of services relative to that of manufactured goods that relies on capital accumulation rather than on an exogenous total factor productivity growth differential. The key assumptions of the two-sector, intertemporal...

Two issues related to mapping a multi-sector model into a reduced-form value-added model are often neglected: the composition of intermediate goods, and the distinction between the productivity indices for value added and for gross output. We illustrate their significance for growth accounting...

We provide an overview of recent empirical research on patterns of cross-country growth. The new empirical regularities considered differ from earlier ones, e.g., the well-known Kaldor stylized facts. The new research no longer makes production function accounting a central part of the analysis....

The first objective of this chapter is to present a new approach to econometric modeling of producer behavior. Our key contribution is to represent the rate and biases of technical change by unobservable or latent variables. We also divide the rate of technical change between components that are...

The point of departure for the study of the impact of energy and environmental policies is the neoclassical theory of economic growth formulated by Cass (1965) and Koopmans (1967). The long-run properties of economic growth models are independent of energy and environmental policies. However,...

The U.S. went through a remarkable structural transformation between 1800 and 2000. In 1800 the majority of people worked in agriculture. Barely anyone did by 2000. What caused the rapid demise of agriculture in the economy? The analysis here concentrates on the development of new consumer goods...