Articles

Business cycles and long-run growth

G. SAINT-PAUL

Oxford Review of Economic Policy

automne 1997, vol. 13, n°3, pp.145-153

Départements : Finance


In this survey, we discuss the effect of macroeconomic fluctuations on long-run growth from both a theoretical and empirical perspective. We emphasize the 'opportunity cost' approach, which states that firms will intertemporally substitute productivity-enhancing activities for regular production activity during recessions. We provide aggregate evidence in favour of the opportunity-cost approach


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