MEASUREMENT OF TREND GROWTH IN EUROPEAN INDUSTRIAL OUTPUT BEFORE 1914 - METHODOLOGICAL ISSUES AND NEW ESTIMATES

The paper uses a structural time series model to reconsider growth in industrial output in 19th-century Europe. The approach is based on an unobserved components methodology in which there is no ex-ante specification of dates at which the trend is hypothesized to have changed and both trend and cycle are stochastic. We find that trend growth was variable over time in several cases but in general was less volatile than has been claimed and also that in general these times series of industrial output are difference rather than trend stationary. © 1990.