Virtues of bad Times英文文献.pdfVIP

Macroeconomic Dynamics , 2, 1998, 322–344. Printed in the United States of America. VIRTUES OF BAD TIMES Interaction Between Productivity Growth and Economic Fluctuations PHILIPPE AGHION University College of London and Center for Economic Policy Research GILLES SAINT -PAUL Universitat Pompeu Fabra and Center for Economic Policy Research We develop a model of optimal productivity growth under demand fluctuations. We consider two alternative hypotheses. First, we assume that productivity growth is costly in terms of current production. Second, we assume that the cost of productivity improvements is independent of current production. It is shown that, in the first case, productivity improvements will be countercyclical whereas, in the second case, they will be procyclical. The model then is used to study the impact of the frequency and amplitude of fluctuations on long-run growth. The results corresponding to the first hypothesis are shown to be consistent with recent empirical work. Keywords: Business Cycles, Endogenous Growth, Opportunity Cost, Labor Hoarding 1. INTRODUCTION Productivity growth and the business cycle had long been recognized as closely interrelated. Yet, for several decades, the two phenomena have been investigated separately by the economic community: On one hand, business-cycle theorists would analyze detrended data and then possibly introduce the trend as exogenous to the cycle; on the other hand, growth theorists would focus on the existence and stability of a long-run deterministic growth path. We thank Antoine d’Autume, Beatriz Armendariz, Patrick Artus, Jean-Pierre Danthine, John Flemming, Pierre- Yves H´enin, Mervyn King, Ariel Pakes, Sergio Rebelo, Mark Shankermann, Alwyn Young, and participants at the ESF conference on growth (Sitges, June 1991), the World Bank conference on national policies and growth (Estoril, January 1993), and participants at seminars in Tilburg, Brussels, and HEC