Learning by doing,organizational forgetting,and the business cycle |
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Authors: | Anelí Bongers |
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Institution: | Department of Economics, University of Malaga, Campus El Ejido, Malaga, Spain |
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Abstract: | This paper supplements a learning-by-doing real business cycle model with endogenous organizational forgetting. Empirical evidence shows that the accumulated experience decay rate is not constant over the business cycle, but that forgetting is a function of economic activity. Learning reinforces the effects of productivity shocks, and organizational forgetting exacerbates their impact and increases their persistence. This is of particular interest when a negative productivity shock hits the economy, as the increasing speed of forgetting aggravates the negative shock and delays recovery. |
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Keywords: | business cycle learning by doing organizational forgetting |
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