Review of Economics and Statistics, 80, 561-571, November 1998.
This paper proposes an explicit test for determining the significance and the timing of slowdowns in economic growth during the postwar period. We examine a large sample of countries (both industrialized and developing), and find that a majority though not all exhibit a significant structural break in their postwar growth rates. In nearly all of these cases, the break was followed by a growth slowdown. The breaks fall into two primary periods which delineate countries by developmental and regional characteristics as well as by the magnitude of the subsequent slowdowns. We find that (a) most industrialized countries experienced postwar growth slowdowns in the early 1970s, though (b) the United States, Canada and the United Kingdom did not, and (c) developing countries (and in particular, Latin American countries) tended to experience much more severe slowdowns which, in contrast with the more developed countries, began nearly a decade later. |
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