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