Output Growth and Employment Fluctuations

This paper develops and estimates with U.S. data a real business cycle model with endogenous long-term growth. The analysis is focused on the joint determination of output and hours of employment. The paper is an attempt to contribute to the integration of business cycle analysis with long-term growth considerations. A practical aspect of this integration pursued in the paper is the decomposition of the output series into permanent and transitory, or cyclical, components. This decomposition is performed in a bivariate (output growth, hours of employment), theory-constrained setup