Technology Shocks and the Labor-Input Response: Evidence from Firm-Level Data
Abstract
We study the relationship between technology shocks and labor input on Swedish firm-level data using a production function approach to identify technology shocks. Taking standard steps yields a contractionary contemporaneous labor-input response in line with previous studies. This finding may, however, be driven by measurement errors in the labor-input variable. Relying on a unique feature of our data set, which contains two independently measured firm-specific labor input measures, we can evaluate the potential bias. We do not find that this bias conceals any true positive contemporaneous effect. The results thus point away from standard flexible-price models and toward models emphasizing firm-level rigidities. Copyright 2007 The Ohio State University.Download Info
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic Info
Article provided by Blackwell Publishing in its journal Journal of Money, Credit and Banking.
Volume (Year): 39 (2007)
Issue (Month): 6 (09)
Pages: 1509-1520
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879
Related research
Keywords:Other versions of this item:
- Carlsson, Mikael & Smedsaas, Jon, 2006. "Technology Shocks and the Labor-Input Response: Evidence from Firm-Level Data," Working Paper Series 198, Sveriges Riksbank (Central Bank of Sweden).
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
References
References listed on IDEASPlease report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Miles S. Kimball & John G. Fernald & Susanto Basu, 2006.
"Are Technology Improvements Contractionary?,"
American Economic Review,
American Economic Association, vol. 96(5), pages 1418-1448, December.
- Susanto Basu & John Fernald & Miles Kimball, 1998. "Are technology improvements contractionary?," International Finance Discussion Papers 625, Board of Governors of the Federal Reserve System (U.S.).
- Susanto Basu & John Fernald & Miles Kimball, 2004. "Are Technology Improvements Contractionary?," NBER Working Papers 10592, National Bureau of Economic Research, Inc.
- Susanto Basu & John Fernald & Miles Kimball, 2004. "Are technology improvements contractionary?," Working Paper Series WP-04-20, Federal Reserve Bank of Chicago.
- Susanto Basu & John Fernald & Miles Kimball, 2002. "Are Technology Improvements Contractionary?," Harvard Institute of Economic Research Working Papers 1986, Harvard - Institute of Economic Research.
- Arellano, Manuel & Bond, Stephen, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Wiley Blackwell, vol. 58(2), pages 277-97, April.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- Fernald, John, 2006.
"Trend Breaks, Long-Run Restrictions and the Contractionary Effects of Technology Improvements,"
CEPR Discussion Papers
5631, C.E.P.R. Discussion Papers.
- John G. Fernald, 2005. "Trend breaks, long-run restrictions, and the contractionary effects of technology improvements," Working Paper Series 2005-21, Federal Reserve Bank of San Francisco.
- Susanto Basu & John G. Fernald, 1996.
"Returns to scale in U.S. production: estimates and implications,"
International Finance Discussion Papers
546, Board of Governors of the Federal Reserve System (U.S.).
- Basu, Susanto & Fernald, John G, 1997. "Returns to Scale in U.S. Production: Estimates and Implications," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 249-83, April.
- Tor Jakob Klette & Zvi Griliches, 1996.
"The Inconsistency of Common Scale Estimators When Output Prices Are Unobserved and Engogenous,"
NBER Working Papers
4026, National Bureau of Economic Research, Inc.
- Klette, Tor Jakob & Griliches, Zvi, 1996. "The Inconsistency of Common Scale Estimators When Output Prices Are Unobserved and Endogenous," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(4), pages 343-61, July-Aug..
- Klette, T.J., 1992. "The Inconsistency of Common Scale Estimators when Output Prices are unobserved and Endogenous," Harvard Institute of Economic Research Working Papers 1586, Harvard - Institute of Economic Research.
- Tor Jakob Klette & Zvi Griliches, 1994. "The Inconsistency of Common Scales Estimators when Output Prices are Unobserved and Endogenous," Discussion Papers 127, Research Department of Statistics Norway.
- Mikael Carlsson, 2003. "Measures of Technology and the Short-run Response to Technology Shocks," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(4), pages 555-579, December.
- Michael Dotsey, 2002. "Structure from shocks," Economic Quarterly, Federal Reserve Bank of Richmond, issue Fall, pages 37-47.
- Ramey, Valerie A & Francis, Neville, 2002.
"Is The Technology-Driven Real Business Cycle Hypothesis Dead? Shocks and Aggregate Fluctuations Revisted,"
University of California at San Diego, Economics Working Paper Series
qt6x80k3nx, Department of Economics, UC San Diego.
- Francis, Neville & Ramey, Valerie A., 2005. "Is the technology-driven real business cycle hypothesis dead? Shocks and aggregate fluctuations revisited," Journal of Monetary Economics, Elsevier, vol. 52(8), pages 1379-1399, November.
- Lawrence J. Christiano & Martin Eichenbaum & Robert Vigfusson, 2003.
"What happens after a technology shock?,"
International Finance Discussion Papers
768, Board of Governors of the Federal Reserve System (U.S.).
- Lawrence J. Christiano & Martin Eichenbaum & Robert Vigfusson, 2003. "What Happens After a Technology Shock?," NBER Working Papers 9819, National Bureau of Economic Research, Inc.
- Annika Alexius & Mikael Carlsson, 2005.
"Measures of Technology and the Business Cycle,"
The Review of Economics and Statistics,
MIT Press, vol. 87(2), pages 299-307, May.
- Alexius, Annika & Carlsson, Mikael, 2002. "Measures of Technology and the Business Cycle," Working Paper Series 2002:10, Uppsala University, Department of Economics, revised 02 Mar 2006.
- Pagan, Adrian, 1984. "Econometric Issues in the Analysis of Regressions with Generated Regressors," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 25(1), pages 221-47, February.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Catherine Fuss & Ladislav Wintr, 2009.
"Rigid labour compensation and flexible employment ? Firm-level evidence with regard to productivity for Belgium,"
Working Paper Research
159, National Bank of Belgium.
- Catherine Fuss & Ladislav Wintr, 2009. "Rigid labour compensation and flexible employment? Firm-level evidence with regard to productivity for Belgium," Working Paper Series 1021, European Central Bank.
- KWON Hyeog Ug & Jun-Hyung KO, 2013. "Do Technology Shocks Lower Hours Worked? Evidence from the Japan Industrial Productivity Database," Discussion papers 13018, Research Institute of Economy, Trade and Industry (RIETI).
- Francesco Furlanetto & Martin Seneca, 2007.
"Rule-of-thumb consumers, productivity and hours,"
Working Paper
2007/05, Norges Bank.
- Francesco Furlanetto & Martin Seneca, 2012. "Rule-of-Thumb Consumers, Productivity, and Hours," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(2), pages 658-679, 06.
Lists
This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.Statistics
Access and download statisticsCorrections
When requesting a correction, please mention this item's handle: RePEc:mcb:jmoncb:v:39:y:2007:i:6:p:1509-1520For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.

