DSpace Collection: http://hdl.handle.net/10023/649 2013-05-19T11:34:58Z 2013-05-19T11:34:58Z On the persistence of output fluctuations in high technology sectors Lasselle, Laurence Aloi, Marta McMillan, David G. http://hdl.handle.net/10023/652 2013-04-18T21:52:36Z 2000-01-01T00:00:00Z Abstract: Fatás (2000) argues that in a cross-section analysis of countries there exists a positive correlation between long-term growth rates and the persistence of output fluctuations. The current paper extends this line of research by examining manufacturing sectors of an economy which can be characterised by two levels of technology; a low level and a high level. Analysis of the data reveals a positive correlation between long-term growth rates and the persistence of output fluctuations in ‘high-tech’ sectors. This empirical analysis is further supported by reformulating the model of Matsuyama (1999b) in a stochastic environment. Within this framework the model is able to capture the two main theories of growth, namely; the Solow model and the Romer model. The stochastic nature of the long run output trend is endogenous and based on technological shocks. Despite the cyclical nature of the shocks we are able to show that output fluctuations are more persistent in ‘high-tech’ sectors. Description: Previously in the University eprints HAIRST pilot service at http://eprints.st-andrews.ac.uk/archive/00000061/ 2000-01-01T00:00:00Z Lasselle, Laurence Aloi, Marta McMillan, David G. Fatás (2000) argues that in a cross-section analysis of countries there exists a positive correlation between long-term growth rates and the persistence of output fluctuations. The current paper extends this line of research by examining manufacturing sectors of an economy which can be characterised by two levels of technology; a low level and a high level. Analysis of the data reveals a positive correlation between long-term growth rates and the persistence of output fluctuations in ‘high-tech’ sectors. This empirical analysis is further supported by reformulating the model of Matsuyama (1999b) in a stochastic environment. Within this framework the model is able to capture the two main theories of growth, namely; the Solow model and the Romer model. The stochastic nature of the long run output trend is endogenous and based on technological shocks. Despite the cyclical nature of the shocks we are able to show that output fluctuations are more persistent in ‘high-tech’ sectors.