This paper estimates whether learning-by-doing effects or cleansing effects of recessions drive the endogenous component of productivity in the United States. Using Bayesian estimation techniques we find that external and internal learning-by-doing effects dominate. We find no evidence for cleansing effects of recessions. Furthermore, the exogenous component of productivity growth is close to the two percent pace.
Business Cycles Cleansing Effects of Recessions Endogenous Growth Learning-by-Doing