This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Journal: Macroeconomics: Vol. 2 No. 4 (October 2010)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter Subscription Information
(Institutional Administrator Access)

Explore:

AEJ: Macro - All Issues

AEJ: Macro Forthcoming Articles

Unmeasured Investment and the Puzzling US Boom in the 1990s

Article Citation

McGrattan, Ellen R., and Edward C. Prescott. 2010. "Unmeasured Investment and the Puzzling US Boom in the 1990s." American Economic Journal: Macroeconomics, 2(4): 88-123.

DOI: 10.1257/mac.2.4.88

Abstract

For the 1990s, the basic neoclassical growth model predicts a depressed economy, when in fact the US economy boomed. We extend the base model by introducing intangible investment and non-neutral technology change with respect to producing intangible investment goods and find that the 1990s are not puzzling in light of this new theory. There is microeconomic and macroeconomic evidence motivating our extension, and the theory's predictions are in conformity with US national accounts and capital gains. We compare accounting measures with corresponding measures for our model economy and find that standard accounting measures greatly understate the 1990s boom. (JEL E22, E23, O33, O47)

Article Full-Text Access

Full-text Article

Additional Materials

Download Data Set (9.93 MB) | Online Appendix (458.68 KB)

Authors

McGrattan, Ellen R. (Federal Reserve Bank of Minneapolis and U MN)
Prescott, Edward C. (Federal Reserve Bank of Minneapolis and AZ State U)

JEL Classifications

E22: Capital; Investment; Capacity
E23: Macroeconomics: Production
O33: Technological Change: Choices and Consequences; Diffusion Processes
O47: Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

Comments

View Comments on This Article (0) | Login to post a comment


American Economic Journal: Macroeconomics


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AEJ: Macro - All Issues

AEJ: Macro - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us