This paper suggests that skill accumulation through past work experience, or "learning-by-doing" (LBD), can provide an important propagation mechanism in a dynamic stochastic general-equilibrium model, as the current labor supply affects future productivity. Our econometric analysis uses a Bayesian approach to combine micro-level panel data with aggregate time series. Formal model evaluation shows that the introduction of the LBD mechanism improves the model's ability to fit the dynamics of aggregate output and hours.
|Number of pages||23|
|Journal||American Economic Review|
|Publication status||Published - 2002 Dec|
All Science Journal Classification (ASJC) codes
- Economics and Econometrics