Economics Professor Presents Paper on Shocks to GDP

Dr. David Cushman, Westminster College professor of economics, recently presented a paper, "The Unlikely Unit Root in U.S. Real GDP," at the Eastern Economic Association Conference in New York.

"Real GDP (gross domestic product) is an inflation-adjusted measure of the country's income and output," Cushman said. "Its movements through time consist of an underlying upward trend and unexpected movements or random shocks. Policy makers are interested in whether the shocks tend to be temporary or permanent.

"The prevailing wisdom is that shocks to GDP are generally permanent. If so, GDP is said to have a unit root.' The finding in my paper is that the unit root is rejected if the statistical tests allow for a gradually changing trend instead of the unchanging trend used in past papers. The rejection of the unit root means that shocks to GDP are generally temporary, in contrast to the prevailing wisdom."

Cushman is the chair of the Department of Economics and Business and the Captain William McKee Chair of Economics and Business and has been with Westminster College since 2005. He earned his undergraduate degree from Stetson University and his master's and Ph.D. from Vanderbilt University.

Contact Cushman at (724) 946-7169 or e-mail cushmado@westminster.edu for more information.

Dr. David Cushman