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Changing technology trends, transition dynamics and growth accounting

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  • Michael R. Pakko

Abstract

The technology growth trends that underlie recent productivity patterns are investigated in a framework that incorporates investment-specific technological progress. Structural-break tests and regime-shifting models reveal the presence of a downward shift in TFP growth in the late 1960s and an upward shift in investment-specific technology growth in the mid-1980s. In both cases, these breaks precede observed changes in labor productivity growth by several years. Simulations of technology growth shocks in a basic neoclassical model show that induced patterns of capital accumulation are consistent with the observed lags between technological advances and changes in productivity growth.

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Bibliographic Info

Paper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 2000-014.

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Date of creation: 2005
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Publication status: Published in Contributions to Macroeconomics, 2005, 5(1), Article 12
Handle: RePEc:fip:fedlwp:2000-014

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Keywords: Technology ; Productivity;

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References

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  1. Kerk Phillips & Jeffrey Wrase, 1999. "Schumpeterian growth and endogenous business cycles," Working Papers 99-20, Federal Reserve Bank of Philadelphia.
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Citations

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Cited by:
  1. Diego Martínez López & Jesús Rodríguez López & José Luis Torres Chacón, 2008. "ICT-specific technological change and productivity growth in the US 1980-2004," Working Papers 08.05, Universidad Pablo de Olavide, Department of Economics.
  2. Peter Ireland & Scott Schuh, 2008. "Productivity and U.S. Macroeconomic Performance: Interpreting the Past and Predicting the Future with a Two-Sector Real Business Cycle Model," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(3), pages 473-492, July.
  3. Richard Dion & Robert Fay, 2008. "Understanding Productivity: A Review of Recent Technical Research," Discussion Papers 08-3, Bank of Canada.
  4. Manuel A. Hidalgo Pérez & Jesús Rodríguez López & José María O´Kean Alonso, 2008. "Labor Demand and Information Technologies: Evidence for Spain, 1980-2005," Working Papers 08.12, Universidad Pablo de Olavide, Department of Economics.
  5. Jesús Rodríguez López & José Luis Torres Chacón, 2009. "Technological sources of productivity growth in Japan, the U.S. and Germany," Working Papers 09.09, Universidad Pablo de Olavide, Department of Economics, revised Mar 2010.
  6. Martínez, Diego & Rodríguez, Jesús & Torres, José L., 2008. "The productivity paradox and the new economy: The Spanish case," Journal of Macroeconomics, Elsevier, vol. 30(4), pages 1569-1586, December.
  7. Benjamin D. Keen & Michael R. Pakko, 2007. "Monetary policy and natural disasters in a DSGE model: how should the Fed have responded to Hurricane Katrina?," Working Papers 2007-025, Federal Reserve Bank of St. Louis.
  8. Peter N. Ireland, 2007. "On the Welfare Cost of Inflation and the Recent Behavior of Money Demand," Boston College Working Papers in Economics 662, Boston College Department of Economics.
  9. Zanetti, Francesco, 2008. "Labor and investment frictions in a real business cycle model," Journal of Economic Dynamics and Control, Elsevier, vol. 32(10), pages 3294-3314, October.

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