R&D spending and cyclical fluctuations: putting the "technology" in technology shocks

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R&D spending and cyclical fluctuations: putting the "technology" in technology shocks

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Alison Butler
Michael R. Pakko

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Michael Pakko

Abstract

We examine the dynamic properties of an endogenous growth model with an explicit R&D sector in order to evaluate its ability to propagate temporary disturbances into persistent fluctuations in macroeconomic variables. We demonstrate that a large proportion of the variability and persistence of measured Solow residuals can be thought of as reflecting the endogenous accumulation and adaptation of technical knowledge rather than simply exogenous processes. By explicitly modeling R&D, we use a framework in which it is possible to explicitly consider the role of technology in "technology shocks."

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Paper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 1998-020.

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Date of creation: 1998
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Handle: RePEc:fip:fedlwp:1998-020

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Other versions:
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Other versions:
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(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.)

Michael R. Pakko, 2005. "Changing technology trends, transition dynamics and growth accounting," Working Papers 2000-014, Federal Reserve Bank of St. Louis. [Downloadable!]
Other versions:
- Michael Pakko, 2005. "Changing Technology Trends, Transition Dynamics, and Growth Accounting," Contributions to Macroeconomics, Berkeley Electronic Press, vol. 5(1), pages 1304-1304. [Downloadable!] (restricted)

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