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The effects of technology shocks on hours and output: a robustness analysis

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  • Fabio Canova
  • David Lopez-Salido
  • Claudio Michelacci

Abstract

We analyze the effects of neutral and investment-specific technology shocks on hours and output. Long cycles in hours are removed 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' are uncorrelated with the estimated technology shocks. Copyright © 2009 John Wiley & Sons, Ltd.

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Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

Volume (Year): 25 (2010)
Issue (Month): 5 ()
Pages: 755-773

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Handle: RePEc:jae:japmet:v:25:y:2010:i:5:p:755-773

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  19. Fabio Canova & David Lopez-Salido & Claudio Michelacci, 2006. "Schumpeterian technology shocks," Economics Working Papers 1012, Department of Economics and Business, Universitat Pompeu Fabra, revised Nov 2007.
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