NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Trends in Hours, Balanced Growth, and the Role of Technology in the Business Cycle

Jordi Gali

NBER Working Paper No. 11130
Issued in February 2005
NBER Program(s):   EFG

The present paper revisits a property embedded in most dynamic macroeconomic models: the stationarity of hours worked. First, I argue that, contrary to what is often believed, there are many reasons why hours could be nonstationary in those models, while preserving the property of balanced growth. Second, I show that the postwar evidence for most industrialized economies is clearly at odds with the assumption of stationary hours per capita. Third, I examine the implications of that evidence for the role of technology as a source of economic fluctuations in the G7 countries.

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Document Object Identifier (DOI): 10.3386/w11130

Published: Gali, Jordi. "Trends In Hours, Balanced Growth, And The Role Of Technology In The Business Cycle," FRB St. Louis - Review, 2005, v87(4,Jul/Aug), 459-486.

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