RDP 2016-08: The Slowdown in US Productivity Growth: Breaks and Beliefs Appendix C: Additional Estimation Results

Rachael McCririck and Daniel Rees

October 2016

Table C1 documents the estimates of the values of the parameters other than those related to productivity growth for our main model.

Table C1: Prior Distributions and Parameter Estimates in the Baseline Model – Additional Parameters
Parameter Description Prior Posterior
Distribution Mean Std error Mean Median 5% 95%
α Capital share N 0.30 0.05 0.17 0.17 0.16 0.18
ιp Price indexation B 0.50 0.15 0.09 0.08 0.03 0.16
ιw Wage indexation B 0.50 0.15 0.21 0.21 0.12 0.30
h Habit formation N 0.60 0.10 0.83 0.83 0.77 0.87
λp Steady-state price mark-up N 0.15 0.05 0.32 0.32 0.25 0.39
logInline Equation Steady-state log hours N 0.00 0.50 –0.01 –0.01 –0.06 0.04
100(Inline Equation Steady-state inflation N 0.63 0.10 0.63 0.63 0.46 0.79
100Inline Equation Discount factor G 0.25 0.10 0.13 0.13 0.06 0.21
ν Inverse Frisch G 2.00 0.75 2.36 2.27 1.18 3.70
ξp Price stickiness B 0.66 0.10 0.86 0.86 0.80 0.93
ξw Wage stickiness B 0.66 0.10 0.73 0.73 0.62 0.82
χ Elasticity utility cost G 5.00 1.00 5.18 5.12 3.42 6.97
Spp Investment-adjusted costs G 4.00 1.00 4.57 4.53 3.45 5.80
ϕπ Reaction inflation N 1.70 0.30 2.06 2.06 1.69 2.45
ϕy Reaction GDP growth N 0.40 0.30 1.15 1.15 0.87 1.42
ρR Auto monetary policy B 0.60 0.20 0.79 0.79 0.74 0.83
ρg Auto spending B 0.60 0.20 0.99 0.99 0.99 1.00
ρφ Auto labour supply B 0.60 0.20 0.98 0.98 0.96 0.99
ρμ Auto investment B 0.60 0.20 0.64 0.65 0.51 0.75
ρp Auto price mark-up B 0.60 0.20 0.84 0.88 0.60 0.95
ρb Auto intertemporal B 0.60 0.20 0.49 0.49 0.34 0.65
100σr Std dev monetary policy IG 0.15 1.00 0.23 0.23 0.21 0.26
100σg Std dev spending IG 0.50 1.00 0.37 0.36 0.33 0.40
100σφ Std dev labour supply IG 1.00 1.00 3.26 3.09 1.65 5.27
100Inline Equation Std dev wage mark-up IG 0.15 1.00 0.39 0.38 0.35 0.43
100σμ Std dev investment IG 0.50 1.00 8.54 8.44 6.40 10.97
100σp Std dev price mark-up IG 0.15 1.00 0.08 0.07 0.06 0.10
100σp Std dev intertemporal IG 0.10 1.00 0.05 0.05 0.03 0.08
100Inline Equation Std dev inflation target IG 0.05 0.04 0.04 0.04 0.02 0.06
Marginal data density: −1,236.7

Note: U denotes uniform distribution, N denotes normal distribution, B denotes beta distribution, G denotes gamma distribution, and IG denotes inverse gamma distribution