Hysteresis and Cyclical Adjustment in the Stock Markets: The Macroeconomic Effects of Technological Progress

19 Pages Posted: 5 Nov 2006

See all articles by Saziye Gazioglu

Saziye Gazioglu

Robert Gordon University - Aberdeen Business School

W. David McCausland

University of Aberdeen - Business School

Date Written: January 2003

Abstract

The aim of this paper is to investigate the effects of technological change on stock market dynamics. We develop an intertemporal optimising model, the central innovation of which is the distinction between the non-perishables and perishables sectors. We discuss the conditions likely to lead to cyclical stock market behaviour in response to technological shocks. Furthermore, we show that one-off technological advances may have persistent effects giving the country a permanent growth advantage. This gives an alternative mechanism for explaining differential growth rates to that already established in the endogenous growth literature.

Keywords: stock market, hysteresis

JEL Classification: E30, G10, O16, O40

Suggested Citation

Gazioglu, Saziye and McCausland, W. David, Hysteresis and Cyclical Adjustment in the Stock Markets: The Macroeconomic Effects of Technological Progress (January 2003). Available at SSRN: https://ssrn.com/abstract=942296 or http://dx.doi.org/10.2139/ssrn.942296

Saziye Gazioglu

Robert Gordon University - Aberdeen Business School ( email )

Garthdee Road
Aberdeen AB10 7QE
United Kingdom

W. David McCausland (Contact Author)

University of Aberdeen - Business School ( email )

Edward Wright Building
Dunbar Street
Old Aberdeen AB24 3QY, Scotland AB24 3QY
United Kingdom

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