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Learning by doing, organizational forgetting, and the business cycle

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  • Anelí Bongers

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.

Suggested Citation

  • Anelí Bongers, 2023. "Learning by doing, organizational forgetting, and the business cycle," Bulletin of Economic Research, Wiley Blackwell, vol. 75(1), pages 141-150, January.
  • Handle: RePEc:bla:buecrs:v:75:y:2023:i:1:p:141-150
    DOI: 10.1111/boer.12346
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