American Economic Review Vol. 89 No. 1 1999
Technology, Employment, and the Business Cycle: Do Technology Shocks Explain Aggregate Fluctuations?
open access
Abstract
I estimate a decomposition of productivity and hours into technology and non-technology components. Two results stand out: (a) the estimated conditional correlations of hours and productivity are negative for technology shocks, positive for nontechnology shocks; (b) hours show a persistent decline in response to a positive technology shock. Most of the results hold for a variety of model specifications, and for the majority of G7 countries. The picture that emerges is hard to reconcile with a conventional real-business-cycle interpretation of business cycles, but is shown to be consistent with a simple model with monopolistic competition and sticky prices.
- DOI
- 10.1257/aer.89.1.249
- Volume
- 89
- Issue
- 1
- Pages
- 249-271
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref