The Dynamic Effects of Neutral and Investment-Specific Technology Shocks
The Dynamic Effects of Neutral and Investment-Specific Technology Shocks

Author: Jonas D. M. Fisher

Publisher:

Published: 2015

Total Pages:

ISBN-13:

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The neoclassical growth model is used to identify the short-run effects of neutral technology shocks, which affect the production of all goods homogeneously, and investment-specific shocks, which affect only investment goods. The real equipment price, crucial for identifying the investment shocks, experiences an abrupt increase in its average rate of decline in 1982, so the analysis is based on a split sample. On the basis of the preferred specification, the two technology shocks account for 73 percent of hours' and 44 percent of output's business cycle variation before 1982, and 38 percent and 80 percent afterward. The shocks also account for more than 40 percent of hours' and 58 percent of output's forecast errors over a three- to eight-year horizon in both samples. The majority of these effects are driven by the investment shocks.

Interpreting Investment-Specific Technology Shocks (IST)
Interpreting Investment-Specific Technology Shocks (IST)

Author: Luca Guerrieri

Publisher: DIANE Publishing

Published: 2011-05

Total Pages: 47

ISBN-13: 1437939074

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IST shocks are often interpreted as multi-factor productivity (MFP) shocks in a separate investment-producing sector. However, this interpretation is strictly valid only when some stringent conditions are satisfied. Some of these conditions are at odds with the data. Using a two-sector model whose calibration is based on the U.S. Input-Output Tables, the authors consider the implications of relaxing several of these conditions. They show how the effects of IST shocks in a one-sector model differ from those of MFP shocks to an investment-producing sector of a two-sector model. MFP shocks induce a positive short-run correlation between consumption and investment consistent with U.S. data, while IST shocks do not. Illus. This is a print on demand report.

Technology Shocks and Aggregate Fluctuations
Technology Shocks and Aggregate Fluctuations

Author: Mr.Pau Rabanal

Publisher: International Monetary Fund

Published: 2004-12-01

Total Pages: 68

ISBN-13: 1451875657

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Our answer: Not so well. We reached that conclusion after reviewing recent research on the role of technology as a source of economic fluctuations. The bulk of the evidence suggests a limited role for aggregate technology shocks, pointing instead to demand factors as the main force behind the strong positive comovement between output and labor input measures.

Investment Specific Technology Shocks and Emerging Market Business Cycle Dynamics
Investment Specific Technology Shocks and Emerging Market Business Cycle Dynamics

Author: Aydan Dogan

Publisher:

Published: 2017

Total Pages: 46

ISBN-13:

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This article explores the role of investment specific technology shocks for emerging market business cycle fluctuations. The analysis is motivated by two key empirical facts; the presence of investment specific technical change in the post-war US economy together with the importance of investment goods for the emerging market imports. The goal of this paper is to quantify the contribution of the investment specific technical change in the US for the business cycles of an emerging country in the context of a two country, two sector international real business cycle framework with investment and consumption goods sectors. We estimate the model for Mexico and US data and find that a permanent US originating investment specific technology shock is very important in explaining the Mexican output and investment dynamics. This shock explains around 80% of the investment variability and it accounts for the around 45% of the output variability. We argue that the model's ability to account for the important business cycle features of the data is dependent on the presence of shocks that capture financial frictions as well as a permanent investment specific technology shock that originates in the US.

On the Robust Effects of Technology Shocks on Hours Worked and Output
On the Robust Effects of Technology Shocks on Hours Worked and Output

Author: Fabio Canova

Publisher:

Published: 2014

Total Pages: 29

ISBN-13:

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We analyze the effects of neutral and investment-specific technology shocks on hours worked and output. Low frequency movements in hours are captured in a variety of ways. Hours robustly fall in response to neutral shocks and robustly increase in response to investment specific shocks. The percentage of the variance of hours (output) explained by neutral shocks is small (large); the opposite is true for investment specific shocks. News shocks and other shocks are uncorrelated with the estimated neutral and investment specific shocks.

Methods Versus Substance
Methods Versus Substance

Author: Cristina Fuentes-Albero

Publisher:

Published: 2009

Total Pages: 58

ISBN-13:

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In this paper, we employ both calibration and modern (Bayesian) estimation methods to assess the role of neutral and investment-specific technology shocks in generating fluctuations in hours. Using a neoclassical stochastic growth model, we show how answers are shaped by the identification strategies and not by the statistical approaches. The crucial parameter is the labor supply elasticity. Both a calibration procedure that uses modern assessments of the Frisch elasticity and the estimation procedures result in technology shocks accounting for 2% to 9% of the variation in hours worked in the data. We infer that we should be talking more about identification and less about the choice of particular quantitative approaches.

The Measurement of Durable Goods Prices
The Measurement of Durable Goods Prices

Author: Robert J. Gordon

Publisher: University of Chicago Press

Published: 2007-12-01

Total Pages: 744

ISBN-13: 0226304604

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American business has recently been under fire, charged with inflated pricing and an inability to compete in the international marketplace. However, the evidence presented in this volume shows that the business community has been unfairly maligned—official measures of inflation and the standard of living have failed to account for progress in the quality of business equipment and consumer goods. Businesses have actually achieved higher productivity at lower prices, and new goods are lighter, faster, more energy efficient, and more reliable than their predecessors. Robert J. Gordon has written the first full-scale work to treat the extent of quality changes over the entire range of durable goods, from autos to aircraft, computers to compressors, from televisions to tractors. He combines and extends existing methods of measurement, drawing data from industry sources, Consumer Reports, and the venerable Sears catalog. Beyond his important finding that the American economy is more sound than officially recognized, Gordon provides a wealth of anecdotes tracing the postwar history of technological progress. Bolstering his argument that improved quality must be accurately measured, Gordon notes, for example, that today's mid-range personal computers outperform the multimillion-dollar mainframes of the 1970s. This remarkable book will be essential reading for economists and those in the business community.