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Yes. We construct a measure of aggregate technology change, controlling foraggregation effects, varying utilization of capital and labor, nonconstant returns,and imperfect competition. On impact, when technology improves, input use andnonresidential investment fall sharply. Output changes little. With a lag of severalyears, inputs and investment return to normal and output rises strongly. Thestandard one-sector real-business-cycle model is not consistent with this evidence.The evidence is consistent, however, with simple sticky-price models, which predictthe results we find: when technology improves, inputs and investment generally fallin the short run, and output itself may also fall. (JEL E22, E32, O33)