The postwar U.S. business cycle is characterized by positive comovement of employment and output across sectors. It has been argued that multi-sector growth models are inconsistent with this observation when changes in relative productivities are the main source of fluctuations. We suggest that...

Solow residuals are used as proxies for productivity shocks in many empirical studies. Considering the shortcomings of this approach this paper proposes the common trends approach as an alternative. The common trends econometric technique is utilized here in an attempt to identify and analyze...