Has the American Output Growth Path Experienced a Permanent Change?
Output growth, business cycle, permanent and transitory components
In this paper, I derive and apply three univariate methods and one bi-variate method to estimate permanent and transitory components of the American output growth path during the 1790 to 2017 period. The results show that statistical tests give little support to the hypothesis of signiﬁcant permanent growth rate changes (univariate methods). The "special century" (1870-1970, as deﬁned by Gordon (2016)) exhibited more volatile permanent shifts in the output level compared to recent decades (bivariate method).