Learning-by-doing and aggregate fluctuations

Russell Cooper, Alok Johri

Research output: Contribution to journalArticle

27 Citations (Scopus)

Abstract

An unresolved issue in business cycle theory is the endogenous propagation of shocks yielding allocations that exhibit the persistence displayed in the data. This paper explores the quantitative implications of one propagation mechanism: learning-by-doing, whose parameters are estimated using sectoral and plant level observations in the U.S. which are then integrated into a stochastic growth model with technology shocks. We conclude that learning-by-doing can be a powerful mechanism for generating endogenous persistence. Moreover learning-by-doing implies that the employment decision of the representative agent is dynamic which allows a re-interpretation of "taste shocks" or "cyclical labor utilization" as endogenous labor supply shifts.

Original languageEnglish (US)
Pages (from-to)1539-1566
Number of pages28
JournalJournal of Monetary Economics
Volume49
Issue number8
DOIs
StatePublished - Nov 1 2002

Fingerprint

Aggregate fluctuations
Learning-by-doing
Persistence
Integrated
Propagation
Representative agent
Stochastic growth model
Technology shocks
Labour utilization
Endogenous labor supply
Business cycle theory
Propagation mechanism

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

Cite this

Cooper, Russell ; Johri, Alok. / Learning-by-doing and aggregate fluctuations. In: Journal of Monetary Economics. 2002 ; Vol. 49, No. 8. pp. 1539-1566.
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Learning-by-doing and aggregate fluctuations. / Cooper, Russell; Johri, Alok.

In: Journal of Monetary Economics, Vol. 49, No. 8, 01.11.2002, p. 1539-1566.

Research output: Contribution to journalArticle

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