McGrattan, Ellen. <br/><br/>
Why Did U.S. Market Hours Boom in the 1990s? / 
Ellen McGrattan, Edward Prescott. 
 - Cambridge, Mass.  National Bureau of Economic Research  2006. 
 - 1 online resource:  illustrations (black and white); 
 - NBER working paper series  no. w12046 .
 - Working Paper Series (National Bureau of Economic Research)  no. w12046. .
<br/><br/> February 2006. 
<br/><br/> During the 1990s, market hours in the United States rose dramatically.  The rise in hours occurred as gross domestic product (GDP) per hour was declining relative to its historical trend, an occurrence that makes this boom unique, at least for the postwar U.S. economy.  We find that expensed plus sweat investment was large during this period and critical for understanding the movements in hours and productivity.  Expensed investments are expenditures that increase future profits but, by national accounting rules, are treated as operating expenses rather than capital expenditures. Sweat investments are uncompensated hours in a business made with the expectation of realizing capital gains when the business goes public or is sold.  Incorporating expensed and sweat equity into an otherwise standard business cycle model, we find that there was rapid technological progress during the 1990s, causing a boom in market hours and actual productivity. 
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