Articlegreen1996

Technology, Employment, and the Business Cycle: Do Technology Shocks Explain Aggregate Fluctuations

1,731 citations0/0 files storedAmerican Economic Review

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Monetary Policy and Economic Impact Labor market dynamics and wage inequality Economic Growth and Productivity

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. (JEL E32, E24)

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References

1982Time to Build and Aggregate Fluctuations 1988The Dynamic Effects of Aggregate Demand and Supply Disturbances

Cited by

2011When Is the Government Spending Multiplier Large?2004Some Evidence on the Importance of Sticky Prices 2010Shocks and Frictions in US Business Cycles: A Bayesian DSGE Approach 1999Chapter 2 Monetary policy shocks: What have we learned and to what end?2002Some Evidence on the Importance of Sticky Prices 2016Macroeconomic Shocks and Their Propagation 2010An Estimated Dynamic Stochastic General Equilibrium Model of the Euro Area 2009Structural Vector Autoregressions: Theory of Identification and Algorithms for Inference

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