A comment on 'Testing Goodwin: growth cycles in ten OECD countries'

TL;DR

This paper revisits previous growth cycle analysis in OECD countries, correcting a reporting mistake which significantly alters the estimated parameters and equilibrium employment rates, leading to more realistic results.

Contribution

It identifies and corrects a reporting error in Harvie (2000), resulting in improved parameter estimates and more accurate economic conclusions.

Findings

Corrected parameter estimates for the Philips curve.

More realistic equilibrium employment rates.

Significant differences from previous results.

Abstract

We revisit the results of Harvie (2000) and show how correcting for a reporting mistake in some of the estimated parameter values leads to significantly different conclusions, including realistic parameter values for the Philips curve and estimated equilibrium employment rates exhibiting on average one tenth of the relative error of those obtained in Harvie (2000).