INTERNATIONAL INTERDEPENDENCE OF NATIONAL GROWTH-RATES - A STRUCTURALTRENDS ANALYSIS

This paper identifies two structural trends responsible for growth in per capita industrial production in the US, the UK and Japan, First, u sing Johansen's multivariate cointegration approach, the number of com mon trends in the three industrial production series and the real pric e of oil is estimated to be two. Next, long-run restrictions are used to separate structural errors with temporary effects from those with p ermanent effects. Finally, it is assumed that the oil price is affecte d by only a single structural trend. This identifies a trend, which ha s a structural interpretation as a natural resource constraint, and an other trend with positive drift, interpreted as productivity.