To the Abyss and Beyond
Abstract. Life cycle hypothesis and Solow neo-classical growth concepts are used to construct and estimate VAR models of USA’s GDP dynamics. Conditional forecasts are then made for those two variables for the next two years, using different assumptions regarding the future dynamics of the household’s net worth. Results show that under all assumptions the US GDP growth GDP remains sluggish. The historical peak GDP level (achieved in Q2 from 2008) is not achieved by the Ql of 2011.