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Technology Shocks and Job Flows

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Author Info
Lopez-Salido, Jose David
Michelacci, Claudio

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Abstract

We decompose the low-frequency movements in labour productivity into an investment-neutral and investment-specific technology component. We show that neutral technology shocks cause an increase in job creation and job destruction and lead to a reduction in aggregate employment. Investment-specific technology shocks reduce job destruction, have mild effects on job creation and are expansionary. We construct a general equilibrium search model with neutral and investment-specific technological progress. We show that the model can replicate these findings if neutral technological progress is mainly embodied into new jobs, while investment-specific technological progress benefits (almost) equally old and new jobs. Thus neutral technological advances prompt waves of Schumpeterian creative destruction, while the adoption of investment-specific technologies operates mainly as in the standard neoclassical growth model.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4426.

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Date of creation: Jun 2004
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Handle: RePEc:cpr:ceprdp:4426

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Related research
Keywords: creative destruction search frictions technological progress

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Find related papers by JEL classification:
E00 - Macroeconomics and Monetary Economics - - General - - - General
J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes

References listed on IDEAS
Please 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.:

  1. Aghion, Philippe & Howitt, Peter, 1994. "Growth and Unemployment," Review of Economic Studies, Blackwell Publishing, vol. 61(3), pages 477-94, July. [Downloadable!] (restricted)
    Other versions:
  2. Ahituv, Avner & Zeira, Joseph, 2000. "Technical Progress and Early Retirement," CEPR Discussion Papers 2614, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  3. Andolfatto, David, 1996. "Business Cycles and Labor-Market Search," American Economic Review, American Economic Association, vol. 86(1), pages 112-32, March. [Downloadable!] (restricted)
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Cited by:
(explanations, Please 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.)

  1. Fabio Canova & David Lopez-Salido & Claudio Michelacci, 2006. "The Labor Market Effects of Technology Shocks," Economics Working Papers 1012, Department of Economics and Business, Universitat Pompeu Fabra, revised Nov 2007. [Downloadable!]
    Other versions:
  2. Andreas Hornstein & Per Krusell & Giovanni L. Violante, 2006. "Technology-policy interaction in frictional labor markets," Working Paper 06-10, Federal Reserve Bank of Richmond. [Downloadable!]
    Other versions:
  3. Philippe Azkenazy & Eva Moreno, 2004. "The impact of technological and organizational changes on labor flows. Evidence on French establishments," DELTA Working Papers 2004-25, DELTA (Ecole normale supérieure). [Downloadable!]
  4. Philippe, ASKENAZY & Eva, MORENO-GALBIS, 2004. "The impact of technological and organizatioanl changes on labor flows. Evidence on French establishments," Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) Discussion Paper 2004031, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES). [Downloadable!]
  5. Morten O. Ravn & Saverio Simonelli, 2007. "Labor Market Dynamics and the Business Cycle: Structural Evidence for the United States," Economics Working Papers ECO2007/13, European University Institute. [Downloadable!]
    Other versions:
  6. Javier Díaz-Giménez & Josep Pijoan-Mas, 2006. "Flat Tax Reforms In The U.S.: A Boon For The Income Poor," Working Papers wp2006_0611, CEMFI. [Downloadable!]
    Other versions:
  7. Federico S. Mandelman & Francesco Zanetti, 2008. "Technology shocks, employment, and labor market frictions," Working Paper 2008-10, Federal Reserve Bank of Atlanta. [Downloadable!]
  8. Burcu Eyigungor, 2008. "Specific capital and vintage effects on the dynamics of unemployment and vacancies," Working Papers 08-6, Federal Reserve Bank of Philadelphia. [Downloadable!]
  9. Régis Barnichon, 2007. "Productivity, Aggregate Demand and Unemployment Fluctuations," CEP Discussion Papers dp0819, Centre for Economic Performance, LSE. [Downloadable!]
  10. Michael U. Krause & David J. Lopez-Salido & Thomas Lubik, 2007. "Do Search Frictions Matter for Inflation Dynamics?," Kiel Working Papers 1353, Kiel Institute for the World Economy. [Downloadable!]
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